Bankruptcy despite being the best way to get rid of your debts, is often misunderstood by people. People fear that it might put them in a worse situation without realizing that being under a huge mountain of debt is the worst thing for people. Dallas based bankruptcy law firm Recovery Law Group discusses some of the myths associated with bankruptcy:
- Bankruptcy can damage your credit permanently
Though bankruptcy does influence your credit report, it is not a permanent one. Compared to late payments and bad credit on your credit report, the effect of bankruptcy is minimal. Depending on the chapter of bankruptcy filed, bankruptcy is mentioned on your credit report for 7-10 years, yet you start getting credit just after a bankruptcy discharge. You can get secured credit cards and after making timely payments on them, you can even get a regular credit card within a couple of years of the bankruptcy discharge.
- Your employer will come to know of your bankruptcy
Though bankruptcy is public record, its copies are not sent to your employer. Apart from your creditors, bankruptcy trustee and lawyers, nobody else becomes aware of your bankruptcy, unless they specifically go looking for it. Any person who sees your credit report will come to know of your bankruptcy.
- Filing for bankruptcy will result in loss of all property
Exemptions are available by both federal and state government to protect necessities for bankruptcy filer. Thanks to those exemptions, you can protect most of your assets including equity in vehicle and home, personal possessions, retirement accounts, etc. While federal exemptions are common throughout the country, state exemptions vary.
- Bankruptcy gets rid of all debts
Most of the debts are discharged in bankruptcy; however, there are certain debts that survive bankruptcy like a student loan, court fines, alimony and child support, etc.
- Bankruptcy reflects irresponsibility
Any person who has had the misfortune of making the wrong investment can be under huge debt. Rising medical costs and job scare can throw any person under large debts. Thus, despite being a responsible person, people might end up in a situation which requires them to file for bankruptcy.
- You don’t need lawyers to file for bankruptcy
Though it is not essential for you to hire a lawyer if you wish to file for bankruptcy, it is beneficial. An experienced lawyer can be the difference between getting your debts discharged or your case dismissed. In case you need to consult with experienced bankruptcy attorneys, you can do so by calling 888-297-6023.