There are many myths associated with filing for bankruptcy. Unfortunately, many people in need of debt relief do not seek the financial relief they need because they are afraid of how bankruptcy will affect their life. If you are someone who could benefit from filing for bankruptcy, but are feeling hesitant for some reason or another, please take a moment to read through this blog. You may discover that something you thought was true about bankruptcy is actually just a myth.
Myth #1: My credit will be permanently ruined.
Fact: This may be the most misconceived notion about bankruptcy. Although a bankruptcy will appear on your credit report for 10 years, it does not mean you will never be able to obtain credit again. In fact, many people have been able to start rebuilding their credit within a few years.
Myth #2: I will lose my home, car, and other valuable assets.
Fact: When a person files for
Chapter 7 bankruptcy, some of his/her assets will be liquidated (sold off) to repay creditors. However it is very rare when a person's home or car is liquidated. Furthermore, if you file for
Chapter 13 bankruptcy, you do not even need to worry about your assets being liquidated. In Chapter 13, your debts are just consolidated into one lump sum, which you are responsible for paying off over the course of three to five years.
Myth #3: My employer will found out that I filed for bankruptcy.
Fact: The only way your employer will know if you filed for bankruptcy is if you tell him/her or if he/she searches the public record. There is no law that states employers must be notified when their employees file for bankruptcy.
Myth #4: I will get fired from my job.
Fact: It is against the law for your employer to fire you for filing for bankruptcy. If your employer is threatening to fire you, or if your employer has already filed you, you should consult an employment law attorney about filing a wrongful termination lawsuit.
Myth #5: Only deadbeats file for bankruptcy.
Fact: This could not be further from the truth. There are many honest, hardworking people who simply fall under unfortunate circumstances that cause them to fall behind on their payments. An unexpected illness, a serious accident, a sudden job layoff, a divorce, a family emergency: all of these situations could impact a person's financial stability.
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