Misconceptions About Bankruptcy

When people hear the word bankruptcy, they tend to feel afraid. Thoughts of losing everything to start over can seem like a punishment for struggling with finances. The truth is, most people who seek bankruptcy are there through little fault of their own. Another truth is, most of what people are afraid of in bankruptcy is simply not true.

Common Myths

I will lose all my assets. People think they‘ll lose all their property and belongings. That‘s not true. It‘s usually your secured property that is at risk of liquidation, and that‘s usually your house or car. However, how liquidation works effects everyone differently. Often times, people find that the bankruptcy exemption laws protect  many of their assets they fear were at risk.

I will never get credit again. People also think you‘ll be blacklisted from getting credit after a bankruptcy. That‘s not true either. When you file for bankruptcy and have debts discharged, your credit score can actually improve now that all the debt has been eliminated. Some credit lenders even target post-bankruptcy consumers looking to rebuild their credit score with a new, smaller line of credit.

I will be blacklisted by my friends and employer. People tend to fear bankruptcy will make them look bad, which is false. The truth is resolving a debt problem through bankruptcy is often the better solution to financial hardship than continuing to borrow and struggle for repayment. As for your employer, they rarely find out about a bankruptcy unless there is a need to know such as you were under a wage garnishment order that has been terminated in bankruptcy. Also, there are laws that prohibit employers from discriminating against you based on your bankruptcy filing.

Filing for bankruptcy can be an overwhelming process. Our team of Houston bankruptcy lawyers has walked many individuals through the process with ease and success. Call our office today at 713-979-2279 to learn more and ask questions regarding the bankruptcy process.