13
Dec
10

Myths About Bankruptcy

Sometimes, a fresh financial fresh start makes sense – just don’t fall victim to the common myths and misperceptions about Bankruptcy.

Bankruptcy has a bad reputation based on a little bit of truth and a great deal of unknown. Now, if you’re considering filing bankruptcy, of course not everything has turned out perfectly in your financial world.  But bankruptcy can be your ticket to a better financial future.

All debts are wiped out in Chapter 7 bankruptcy. Not exactly. Certain types of debts cannot be erased. They include child support and alimony, student loans, most taxes and debts incurred as the result of fraud.

I’ll lose everything. This is the myth that keeps people who really should file for bankruptcy from doing it.  You’re not left with a barrel and suspenders to wear.  Most Chapter 7 cases are “no asset” cases where the bankruptcy trustee does not take any property whatsoever either because it is exempt from sale or the property doesn’t have a fair market value that makes it worth the time to attempt to sell it.

All my neighbors and friends will know I’ve filed for bankruptcy. Unless your friends and neighbors are going to search public records the chances are very good that the only people who will know about a filing are your creditors. Bankruptcy is a public legal proceeding but the numbers of people filing are so large, very few publications have the space, the wherewithal or the inclination to run all of them.

I’ll never get credit again. Not necessarily. You will be able to obtain credit, it will just cost more as in a higher interest rate and/or more money down.  However, if your credit is shot, you’re already struggling to find credit and if you do it is already expensive.

Only deadbeats and cheaters file for bankruptcy. Many times the reason people fall behind on their debts is because something traumatic has occurred – the loss of a job, a medical emergency, etc.  The lack of income, the staggering medical bills, or other tragedy becomes overwhelming.  It happens to the best of people.  Bankruptcy offers a financial fresh start.

I can run up my credit cards and if I have to I’ll just file for bankruptcy. Filing for bankruptcy is the worst ‘negative’ you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for 10 years.  And if your thinking about filing for bankruptcy and decide “well, I’m going to file bankruptcy anyways, I might as well max out my cards before I do it” that’s fraud.  That could land you in a world of hurt you’d much rather avoid. Bankruptcy is not a step one should take lightly.

Find out more at http://www.financialfreshstart.org.

info@financialfreshstart.org

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The content found on the financialfreshstart Blog is not legal advice and is purely for informational purposes. The Zarcone Law Firm does not guarantee the accuracy, integrity or quality of submissions. The information provided by the bloggers on this site may not represent the opinions of the Zarcone Law Firm or its affiliates. The information contained herein is not a substitute for the advice of an attorney.

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