April 2024

The Top 5 Myths About Bankruptcy That May Be Holding You Back

When it comes to bankruptcy, there are a lot of misconceptions that can make people hesitant to consider it as a solution to

their financial problems. In this post, we'll break down the top 5 myths about bankruptcy and explain why they may not be as true as you think. By debunking these myths, we hope to help you make a more informed decision about whether bankruptcy is right for you.

Bankruptcy is a powerful tool for getting out of debt and starting fresh, but many people are hesitant to consider it due to common misconceptions about what bankruptcy entails. Here are the top 5 myths about bankruptcy and why they may not be true:

Myth: Bankruptcy will ruin your credit forever.

Fact: While bankruptcy will initially have a negative impact on your credit score, it's possible to rebuild your credit over time. Bankruptcy remains on your credit report for up to 10 years, but you can still work to establish new lines of credit and make responsible financial decisions.

Myth: You'll lose everything you own if you file for bankruptcy.

Fact: While some assets may be sold in order to pay off your debts, bankruptcy law provides exemptions for many types of property, such as your primary residence, personal property, and retirement accounts. Your bankruptcy attorney can help you understand which assets may be exempt and which may be at risk.

Myth: Bankruptcy is only for people who are irresponsible with money.

Fact: Bankruptcy can happen to anyone, regardless of how responsible they are with their finances. Unexpected medical expenses, job loss, divorce, or other life events can all lead to financial hardship and make bankruptcy a necessary option.

Myth: You'll never be able to get credit again after filing for bankruptcy.

Fact: While it's true that bankruptcy can make it more difficult to get credit initially, there are lenders who specialize in

working with people who have filed for bankruptcy. By making responsible financial decisions and rebuilding your credit over time, you can eventually qualify for credit again.

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The Top 5 Myths About Bankruptcy That May Be Holding You Back
Rosalind B. Johnson Esq.

Managing Attorney