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A Few Bankruptcy Myths And Facts Revealed

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It is unfortunate that many bankruptcy myths and facts are being considered as being real in mainstream society. However, unless you learn what is true and what is not, you will never really know. Our bankruptcy attorneys will tell you everything you need to know.


Bankruptcy myths

Where do the myths on bankruptcy come from?


Firstly, many of the bankruptcy myths doing rounds out there are spread by good intentioned people who have been misinformed by reading information from websites that lack credibility. A lot of rumors are adopted as mainstream realities. Secondly, credit companies are also caught in the fray with the information they channel in the public domain to prevent their clients from defaulting on their interest payments. Finally, some financial advisors are interested in fame and try to rake up their ratings by co-signing on controversial subjects without giving much credence to the truth. A good number of the editors, writers and personalities speak for the corporate either directly or indirectly.


Today, the bankruptcy process is not as cheap as it used to be several years ago. There are a few extra hurdles one must make their way through and having a bankruptcy lawyer is highly recommended. Recent consumer surveys from reputable institutions reveal that citizens are aware of the new bankruptcy law passed but have absolutely no idea what the legislation entails.


Bankruptcy myths and facts

Here are some important questions that seem obvious but the answers may not be forthcoming.


How many times can one file for bankruptcy?


Contrary to myths about bankruptcy, consumers do not have the unlimited right to file for bankruptcy whenever they are stuck. New strict limitations have been incorporated into law. Any individual who had previously filed for bankruptcy under the Chapter 7 stipulation will be unable to do so again on the same chapter for a period of not less than 8 years. If they had previously filed under Chapter 13, a discharge will not materialize if one had gone through another Chapter 13 discharge and four years of a Chapter 7, 11 or 12.


Does filing for bankruptcy guarantee the consumer a clean slate?


This assumption is not entirely accurate. Bankruptcy leaves a ‘persistent stain’ on your credit report, which lowers your credit score and is viewed with skepticism whenever your credit profile is viewed. Such a rating leaves the consumer exposed to credit with high interest rates, difficulty in renting an apartment and problems in their job search. Consumers here are advised to explore all options available such as counseling on their credit, debt consolidation among others before filing for bankruptcy.


There is this myth about bankruptcy, which claims that all your debts are alleviated when you file for bankruptcy. That is not the case. Debts such as your student loans, child support and taxes are excluded from this safety net.


Myths about bankruptcy

Despite the bankruptcy proceedings can I salvage my properties?


Keeping your house, boat or even vehicle is absolutely impossible, especially if the loan is yet to be offset. If the vehicle was purchased, one transfers the lien on the vehicle for its purchase consideration. Before you can keep the asset, you must offset your loan first. People are advised to try as much as they can prevent filing for bankruptcy, as they might end up losing everything. Ensure that you have professionals access your financial information first and try to come up with alternative options on debt solutions. Contrary to many bankruptcy myths, it (bankruptcy) is not the only solution to your financial woes.


Does one become a failure after going through a bankruptcy?


This myth is totally untrue. Making a few bad financial judgments or decisions does not qualify a person to eternal damnation. There is no person who is willing to file for bankruptcy. Bankruptcy myths say that people who file for bankruptcy are ethically wayward. In reality, most, if not all of those filing for bankruptcy are legitimate and honest hard working individuals.


A good number of these people become bankrupt because of losing their jobs, medical complications or even natural calamities and catastrophes. Many people worry that their neighbors or friends might discover about their financial situation. You will be surprised to discover that only your creditors are aware of your financial situation.


There, you now have a few bankruptcy myths and facts and hopefully, you can now tell whether it will be a good or bad idea for you to declare bankruptcy.


Craig R. Chlarson - Utah Bankruptcy Attorney

My name is Craig R. Chlarson. Whether you are seeking to eliminate your debt, typically through a chapter 7 filing, or whether you are seeking to reorganize your debt, typically through a chapter 13 filing, or even if you have basic bankruptcy questions, call me today. I can help you.

To schedule an appointment, call (435) 901-3449

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