Myths About Bankruptcy

Kane County Bankruptcy Lawyer

There are many myths that are associated with bankruptcy. Due to the prevalence of these myths, many people who could get the relief they need through bankruptcy may be afraid to file, or make a serious mistake when filing on their own. Here, we debunk some of the most common bankruptcy myths.

MYTH: I have to qualify for bankruptcy.
Most people will qualify for bankruptcy protection if they have not filed in recent years. You do have to determine which type of bankruptcy you qualify for; Chapter 7 or Chapter 13.

MYTH: Bankruptcy will permanently destroy my credit.
There are consequences that are associated with filing for bankruptcy, and they include:

• Rebuilding your credit after you file for bankruptcy
• How long the bankruptcy stays on your credit report.

While a bankruptcy can stay on your credit report for a period of 10 years, having your credit score improve is a far shorter process. In fact, a foreclosure can be more damaging to your ability to purchase a home in the future than filing for bankruptcy.

MYTH: I will lose everything when I file for bankruptcy.
There are certain exemptions that are allowed in every state. These laws can protect your home, up to a certain value, your car and other assets. A full evaluation of your current financial situation will allow us to advise you about your assets. Most people who file Chapter 7 lose nothing.

MYTH: I need to have a minimum amount of debt.
There is no specified amount that is necessary in order to file for bankruptcy. The question is whether you can afford to pay your outstanding debts. For example, $10,000 in debt may be more than you can afford to pay if the amount of disposable income you have will not allow you to pay off the debt within a reasonable time period.

Contact us today to find out more about these bankruptcy myths.