Bankruptcy Myths

College Park Bankruptcy Attorneys

The concept of bankruptcy is surrounded by myths and misconceptions which deserve to be set aright. A bankruptcy could be just what you need to get out of debt if you are struggling to make payments depending on your circumstances.

The following is an attempt to dispel some common myths regarding bankruptcy. For further inquiries, reach out to the College Park bankruptcy lawyers at The Bankruptcy Law Group LLC right away.

Bankruptcy will eliminate all of my debts. 
While bankruptcy can be a good option for those struggling under considerable debt, it does not magically “get rid” of all the money you owe. There are some items, including unsecured debts, which can be dissolved by filing a Chapter 7 bankruptcy, but others cannot be totally erased. Student loans, structured settlements, and child support must still be paid.

Bankruptcy will ruin my credit. 
Many people fear bankruptcy will ruin their credit for years to come. While it is true that bankruptcy will remain on your credit report for ten years or more, it will not stay there forever. You can even begin to rebuild your credit as soon as you file for bankruptcy and work towards a fresh start.

Only the irresponsible file for bankruptcy. 
Again, untrue. For those who find themselves in dire financial straits, bankruptcy can be a good option for those without anywhere to turn. Bankruptcy is a viable option for families, companies, millionaires, and others. People file bankruptcy for any number of reasons such as medical expenses, inflation, injury, or the loss of a job.

I will lose everything if I file for bankruptcy. 
Depending on which type of bankruptcy you file under, you do not necessarily risk losing everything if you file. In a Chapter 13 bankruptcy, for instance, you can work with the court to set a pre-determined payment system which can help you in paying off your debts while keeping your home, car, or boat.

I can file for bankruptcy multiple times. 
The purpose of bankruptcy is to help you when you have no other options. You can file for bankruptcy more than once, but it may be possible that you lose the protection of the automatic stay bankruptcy provides. You can only receive a chapter 7 discharge every 8 years. This would limit your bankruptcy options if you need to file again within that period.