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Common bankruptcy myths debunked

“Bankruptcy” may not sound like a really positive word but could be the ultimate choice for many people in financial distress. If you have accumulated a huge amount of debt and have no feasible means to repay your creditors, bankruptcy could be on the horizon. Unfortunately, there are numerous myths and misconceptions related to the process. Below we are discussing the bankruptcy myths and facts in depth. 

#1 – Hiring a bankruptcy lawyer is a waste of money, 

Hiring a Hagerstown, MD bankruptcy attorney has many benefits. Yes, you indeed have the right to file for bankruptcy without an attorney, but should you consider that? Probably not. Bankruptcy is a long-drawn and complicated process, which will require considerable time and effort. Not to forget, there is an enormous amount of paperwork involved. Hiring a bankruptcy lawyer will reduce your stress and make the situation better. Your lawyer can negotiate with your creditors for deals and find ways to protect some of your assets. 

#2 – You cannot get loans ever again

There is no denying that bankruptcy can appear on your credit report for as long as ten years. However, you can start reworking on your credit immediately after the process is done. Yes, you may have to pay a higher interest rate for new loans and may have difficulty qualifying for credit cards, but nothing is impossible. It can take time, but if you rebuild your financial profile again, you may have the scope to get a mortgage too. 

#3 – Bankruptcy will discharge all debts

This is a common misconception related to Chapter 7 filings. While bankruptcy can offer you a clean slate to restart working on your finances, it may not discharge all your debts. Chapter 7 discharges unpaid, unsecured debts, including medical bills, unpaid rent, and credit card dues. However, if you were paying for alimony, child support, or have unpaid student loans, you still have to pay for those. Everyone’s situation is unique, and you need to check with an expert to get an overview. 

Other quick aspects

Finally, it is a common fear that a person would lose their home, vehicles, and clothes when filing for bankruptcy. That’s not true. Depending on the circumstances, you could retain your home and vehicle, provided you can repay the loans as per schedule. Also, you don’t have to lose your clothes and could retain most of your personal belongings. Call a lawyer to learn more.

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