Debunking the 3 Biggest Myths About Filing for Bankruptcy
One word that makes most people cringe is “bankruptcy.” Many people hear it and instantly assume the absolute worst. While it’s true that bankruptcy does have some negative implications, it can also be the best option in some financial situations. Despite all that we’ve come to learn about bankruptcy, there are still a number of misconceptions about the process. Here are just a few common myths about filing for bankruptcy.
- Myth: Filing for bankruptcy relieves all of your debts.
While it’s true that bankruptcy can relieve some of your debts, there are certain types of debt that cannot be forgiven, such as student loan debt. The general rule of thumb is that you cannot discharge or get relief from debts that you are deemed personally responsible for. Debts that you can potentially be discharged from generally include personal loans, credit card debt, and medical bills. In fact, a recent Harvard University study showed that medical expenses account for approximately 62% of personal bankruptcies in the US. If you have excessive medical bills, you may be the perfect candidate for a bankruptcy filing. Talk to bankruptcy lawyers for more information.
- Myth: Bankruptcy ruins your financial future.
Although it’s inevitable that you can expect higher interest rates and limited access to credit for between seven and 10 years, in no way does that indicate that your financial future is ruined. In fact, many people claim that their credit scores actually improved after filing for bankruptcy. Aside from that, there are many ways to rebuild your credit after declaring bankruptcy, such as getting a secure credit card. There are some limitations, of course, but if you take advantage of the right financial assets, you can go a long way in getting on the right path toward your financial future.
- Myth: Filing for bankruptcy means you’ll lose everything.
Many people expect to lose all of their possessions upon filing for bankruptcy. In reality, the vast majority of Chapter 7 cases are no-asset cases, which means that you won’t have to give up any possessions. In Chapter 13 cases, you get to keep your assets as well, but their value is a factor that is taken into consideration when configuring your repayment plan.
Ultimately, filing for bankruptcy isn’t always ideal, but in some situations, it’s the best option. For more information about bankruptcy lawyers, contact Craig Cook Oklahoma Lawyers.