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What Are Some Misconceptions of Bankruptcy?

April 13, 2021

When a person is facing overwhelming debt, they may find themselves considering bankruptcy. No one ever wants to be in a situation where they have to consider bankruptcy. Sometimes it can be your best option. There are a lot of negative stigmas about bankruptcy. Too many people don’t want to file for bankruptcy, even if it may be a saving grace. It is better to think of bankruptcy as a fresh start instead of a last resort.

One common misconception that many people have about bankruptcy is that their credit will be ruined forever. That is simply not the case. Though filing bankruptcy does stay on your credit report for up to 10 years and it does make your credit score go down quite a few points, it doesn’t stop you from rebuilding credit. When you file for bankruptcy, credit card companies will offer you credit cards almost immediately, though the terms may not be in your favor. Even if you only put small charges on the card, such as gas for your car, it can help rebuild your credit as long as you make the payments in full.

Another common misconception is that you won’t be able to keep your home or your car. However, that is not always the case. In many situations, people are able to keep their homes and vehicles in Chapter 7. Additionally, many people think that they will never be able to get a mortgage again and will never be able to buy a home. However, when you have begun rebuilding your credit score, you actually may be able to qualify for a mortgage within just a few years.

Though having to file for bankruptcy is a stressful situation, it may be the right move. If you are considering bankruptcy, contact an experienced bankruptcy attorney who can provide you with assistance.