Bankruptcy helps hundreds of thousands of people each year in the United States. However, there are many misconceptions about the bankruptcy process that might confuse people who might consider bankruptcy. The following are some common bankruptcy myths.
You will lose everything you have.
Chapter 7 bankruptcy – the most common kind – does require filers to relinquish nonexempt property to the bankruptcy trustee. However, this does NOT mean you will be left with nothing. If every bankruptcy case took your home, cars, cash, and possessions, no one would file under Chapter 7. There are many exemptions available to apply to property that allow you to keep as much as possible. Some people do not have to give up anything.
Bankruptcy means that you are a failure or taking advantage of the system.
There can be a stigma attached to bankruptcy, though this mostly comes from people who do not understand the process. Filing for bankruptcy does not automatically mean that you are a financial failure. It also does not mean that you chose to irresponsibly make purchases and then want an easy way to avoid paying for them. Instead, many people file bankruptcy because of medical bills, unexpected unemployment, and other circumstances that are completely beyond their control. This should not reflect on your personal abilities or choices.
Your financial future will be ruined.
Yes, a bankruptcy stays on your credit report for years, and it can deter creditors for a period of time. However, it does not mean that you will never be approved for a mortgage, car loan, or credit card again. Bankruptcy can be a responsible choice that results in better credit in the long run than if you had continued missing payments indefinitely.
Consult with a Bankruptcy Lawyer in Memphis about Your Options
Instead of believing bankruptcy myths, discuss the process with Hurst Law Firm, P.A. Call 901.725.1000 or contact us online to speak with a Memphis bankruptcy attorney.