Most people have heard of bankruptcy and understand its purpose, but far fewer people truly understand the bankruptcy process. Unfortunately, bankruptcy information found on the internet is often incorrect or written from the perspective of creditors. Furthermore, bankruptcy rules and exemptions vary from state to state and generally only a licensed attorney in your jurisdiction can advise you accurately on your rights. That being said, here are some of the most common myths and misconceptions about bankruptcy:
Myth #1: Filing for bankruptcy will ruin your life.
This is simply not true. While bankruptcy can impact your credit score, it will not ruin your life. In fact, bankruptcy can actually help you improve your financial situation in the long run. Within a reasonable timeframe it’s possible for bankruptcy filers to recover and even improve their credit score if they adopt good credit practices after their case.
Myth #2: You can only file for bankruptcy once.
This is also not true. You can file for bankruptcy multiple times, but there are restrictions on how often you can file.
Myth #3: You will lose all of your belongings if you file for bankruptcy.
This is also not true. Typically, you will be able to keep most or all your property, even if you file for bankruptcy. The property you keep depends on the exemptions in your state and a bankruptcy lawyer will know what property can or cannot be protected.
Myth #4: Filing for bankruptcy will prevent you from getting a job.
This is not true. In fact, many employers are understanding of people who have filed for bankruptcy. Additionally, federal law prohibits employers from making an employment decision based solely on one’s status as a bankruptcy debtor.
Myth #5: Filing for bankruptcy is a sign of failure.
Bankruptcy is a legal tool and is not a sign of failure. Large corporations, wealthy celebrities, and even local governments have all filed for bankruptcy protection. Historically, bankruptcy law was a key consideration in the founding of the United States and bankruptcy is specifically mentioned in the U.S Constitution. While no one wants to file for bankruptcy, it should never be viewed as a sign of failure, but as the chance to find debt relief and a fresh start.
If you are considering filing for bankruptcy, it is important to talk to a bankruptcy lawyer to discuss your options. If you have any questions about bankruptcy myths or about bankruptcy in general, please contact WM Law for a free appointment with one of our experienced attorneys or visit us at www.kansascitybankruptcy.com. At WM Law, we are “Here to Help”.