Common Bankruptcy Myths

When you think you need to file bankruptcy, be aware of certain myths about it. It is more common than you may think and no one else has to know.

When you find yourself in a financial situation when you are not making ends meet, no matter how strict you make your budget and no matter how much you are putting aside to pay your bills, a bankruptcy attorney may be the answer to your problems. No matter what you may have heard about bankruptcy, it may just be the best financial decision you will ever make.

man with pockets out and hands open
You might need to file bankruptcy, but you have heard certain misconceptions about it.

There are many advantages, including the opportunity to start over again with a clean fiscal slate. However, this is not what most people hear and believe about bankruptcy. Below are some of the common misconceptions that people make about bankruptcy and the facts about bankruptcy.

No One Has To Know

One of the biggest myths that go around about bankruptcy is that everyone will know you filed. However, there is a reason that you only hear about bankruptcy being filed when the people filing are celebrities or prominent people in the community. Unless you are a movie or TV star, or a major player in your city’s politics, chances are very slim that anyone will find out about your bankruptcy filing. Newspapers do not publish lists of people who have filed for bankruptcy, and ultimately, if you do not want people to know you have filed, you can ensure that by not telling people.

You Can Keep Your Property

Talk to your bankruptcy attorney about those items of personal property that are exempt from bankruptcy. Many people avoid filing because they feel that they will lose everything. No creditor is going to come into your home and rip out your carpet after you have filed. No one is going to repossess your furniture. The only way that your property is going to be taken from you is if there is no way for you to be able to make your payments. This is a fact, bankruptcy or not.

If you cannot make your mortgage or auto loan payments, your home will go into foreclosure or your car is going to be repossessed. However, if you file for Chapter 13 bankruptcy, and can make the payments going forward, then you will be able to get your car back and you can save your home from foreclosure with the back payments being paid through your Chapter 13 bankruptcy payment plan.

More Common Than You Think

Many people from a variety of backgrounds and life situations file for bankruptcy. Having to file for bankruptcy does not make you a loser, and does not mean that you have failed in some significant way. The most common reasons that people cite for filing bankruptcy is a job loss, divorce or death of a spouse, or an illness or medical condition that results in excessive medical debt. None of these things is things that you ought to be ashamed of because they happen to everyone and more often than you might think.

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