Common Myths about Bankruptcy

  • Bankruptcy discussion with the client

Shattering Common Myths about Bankruptcy

Money lending is an immensely monetary satisfying business. One of the major reasons why credit card companies and other private lenders thrive is because of the fact that people once used to live beyond their means are a golden goose. They ensure that you are always in debt so that they can make money off you. The biggest way to do this by making bankruptcy, which incidentally, is the best legal resort to get your debts waived off, as one the worst thing to happen to you. To dispel false ideas about bankruptcy, Sacramento based law firm Recovery Law Group busts some of the most common myths associated with bankruptcy while informing why you should not believe them.

Myth 1

Filing for bankruptcy will result in you losing all your property and money. For many people, who are under heavy debts, the worst nightmare is to have everything they possess being taken away. Believing in this myth, many debtors avoid filing for bankruptcy, thinking they are protecting their assets. However, the longer you delay filing for bankruptcy, the more your dues accumulate, giving your creditors a chance to use legal recourse against you and seize your money as well as property. Contrary to the misconception, filing for bankruptcy can hold all legal process to sell off your assets. Bankruptcy actually helps protect your assets from all those people claiming a piece of you.

Myth 2

Filing for bankruptcy means you will never be able to purchase a car or home. Unfortunately, despite being completely false and ridiculous, many people believe this myth and refrain from filing for bankruptcy. However, bankruptcy provides debtors with a clean financial slate, thanks to which, they can rebuild their credit score. After clearing their dues as per the bankruptcy chapter, they can end up buying a vehicle or a home within a few years if they work on their finances.

Myth 3

Hiring a specialized lawyer and filing for bankruptcy is a lengthy, tedious and expensive process which in times of financial distress is something the debtor cannot afford. Unfortunately, filing for bankruptcy is relatively cheaper than fighting legal battles to save your property from the clutches of the creditors. Your creditors will file a lawsuit to claim any and all unpaid dues which will result in you losing your money and property. The smarter option will be to use your money to file for bankruptcy, as you have a better chance of being free of the huge debt you have accumulated than fighting off creditors.