Filing for bankruptcy can be a complex journey, but armed with accurate information, it can be a path to financial peace. The last thing anyone needs when starting this process is to be burdened with dread fueled by misinformation. That’s why we are here to dispel these three common myths about filing for bankruptcy. It’s time to see bankruptcy as a tool that can lead you to a future of financial stability, not one of loss.
Myth 1: Bankruptcy Means You Lose Everything
Online fodder and sensationalizing tabloids have convinced the general public that filing for bankruptcy means losing everything you own. There is this overarching image of a group of bank staff coming into your home, loading your possessions into a truck, and leaving you with nothing. But this is not true.
In every state, exemptions and legal agreements can be obtained to help you keep your valuable assets. Furthermore, bankruptcy professionals, including lawyers, are available to help you navigate your filing process. They know the ins and outs of bankruptcy law and will help you find avenues that could help achieve the most desirable outcome for your individual situation.
Myth 2: Bankruptcy Ruins Your Credit Forever
Another concern many potential bankruptcy filers have is that filing will permanently impact their credit score, and they will not be able to obtain any credit lines. But fear not, because whilst bankruptcy can affect your credit, it is not for forever.
If you file for Chapter 7, you can expect it to impact your credit for ten years. When filing for Chapter 13, you can expect it to impact your credit for only seven years. The latter is a shorter duration due to the filer creating a partial debt repayment plan as opposed to liquidating debt in Chapter 7.
But despite the duration of credit impact, you can still obtain lines of credit.
While it is true that an individual cannot apply for credit cards during the bankruptcy proceedings, once the debt is discharged, you can apply for credit even while your Fico score is impacted. For Chapter 13 filers, they must wait until their debts are paid back in the three to five year period or otherwise seek approval from the court. However, for Chapter 7 filers, the most common bankruptcy filing, once the proceedings are done in four to six months and their debts are discharged, they can apply for lines of credit. See more about how to improve your credit score after bankruptcy.
Myth 3: Bankruptcy is Only for Irresponsible People
Last, but certainly not least, bankruptcy is only for people with irresponsible spending habits. This common myth has made individuals all over the nation feel shame about having to potentially file for bankruptcy. Society has told them that if they made better choices, they would not be in their current financial predicament, but for many, that is far from the truth.
Medical bills, divorces, and job losses can be the leading causes of poor financial health for many individuals. Life can throw these things at you from out of nowhere, and your savings can only take you so far.
Regardless of the circumstances that led to your decision to file for bankruptcy, it’s important to remember that it’s not a reflection of your personal responsibility. You are taking a proactive step to regain control of your financial situation and pave the way for a better financial future. There’s no need to feel shame or guilt.
Don’t Stress About Filing – Consult a Bankruptcy Lawyer!
Don’t let the myths about bankruptcy ruin your chances to achieve a peaceful financial future; consult with Adam M. Freiman, a Baltimore bankruptcy lawyer.
Mr. Freiman has over 25 years of legal experience and helped found some of the most prominent bankruptcy law firms in Baltimore. Now, he focuses on personally representing every client who walks through the doors at his personal law firm. He will help you navigate the challenges and uncertainties of filing for bankruptcy.
Contact our office today to learn more about how he can assist you through your bankruptcy journey!
