When people hear the word bankruptcy, they often picture something dramatic — losing everything, walking away in shame, or never being able to buy a home again. The truth? Bankruptcy is often a lifeline, not a punishment. If you’ve ever wondered whether it might help you or a loved one, let’s bust a few common myths we hear all the time in Houston.
Myth #1: “I’ll lose my house if I file.”
Not necessarily! Texas actually has some of the strongest homestead protections in the country. In many cases, people are able to keep their home while clearing other debts. The key is staying current on your mortgage if you want to keep it.
Myth #2: “Bankruptcy ruins your credit forever.”
Yes, bankruptcy shows up on your credit report — but forever? Nope. Most people start getting credit card offers again within months. And with responsible use, you can rebuild your credit faster than you might think. We’ve seen clients buy cars and even qualify for mortgages a few years after filing.
Myth #3: “Everyone will know I filed.”
Technically, bankruptcy is public record, but unless you’re a celebrity, it’s unlikely anyone you know will be digging through court filings. For most people, the only folks who find out are their creditors, their attorney, and anyone they choose to tell.
Myth #4: “I’ll never be able to have nice things again.”
Bankruptcy isn’t about punishing you — it’s about giving you a fresh start. Many of your personal belongings, retirement accounts, and even your car may be protected under Texas exemption laws. The goal isn’t to strip you of everything, it’s to help you rebuild.
Myth #5: “Bankruptcy means I’ve failed.”
Life happens. Medical bills, job losses, unexpected emergencies — none of these make you a failure. Bankruptcy is a tool written into the law to give honest people a chance to reset. Think of it as hitting the “restart” button, not waving a white flag.
Final Thoughts
If debt is keeping you up at night, you’re not alone. Thousands of Texans file bankruptcy each year, and many go on to lead financially healthy lives. The best step you can take is to get the facts from someone who knows the process inside and out.
At Baker & Associates, we’ve helped Houston families through bankruptcy for years — and we know that every situation is unique. Sometimes bankruptcy is the right answer, and sometimes there are other options worth exploring. Either way, peace of mind starts with a conversation.