Month: May 2016

Categories: Uncategorized

Bankruptcy is a complex legal process that can be intimidating for those considering it. Unfortunately, this has led to the development of many myths and misconceptions about bankruptcy.

 To make matters worse, some of these myths can even prevent individuals from pursuing the financial relief they need. To help clear up any confusion, let’s take a look at seven of the most common myths about bankruptcy and reveal why they are not true. By understanding what bankruptcy really is and how it works, you will be better equipped to make decisions regarding your financial future.

1: Bankruptcy will ruin your credit score. 

This is perhaps the most common myth about bankruptcy and it couldn’t be further from the truth. In fact, filing for bankruptcy can actually help improve your credit score over time as you begin to rebuild credit. The key is making sure that once you have filed for bankruptcy, you are taking steps to establish a good record of repayment and responsible borrowing.

 

2: You can’t ever get credit again after filing for bankruptcy. 

This myth is false, but it does take some time before lenders start trusting you enough to grant new lines of credit or loans. You may not see a high limit any time soon, but it is possible to build up your credit score and eventually obtain new credit.

 

3: Bankruptcy will stop you from getting a job. 

This is false and employers are prohibited from using bankruptcy as the sole basis for denying employment opportunities. In fact, many employers actually prefer to hire candidates that have gone through a bankruptcy or financial hardship due to their newfound knowledge of personal finance and budgeting.

 

4: You can’t discharge taxes in bankruptcy. 

While it is true that certain types of taxes are not able to be discharged, other types of taxes – such as income tax or payroll tax – may be eligible for discharge if they meet certain criteria. It’s important to speak with a qualified attorney to determine which taxes may be discharged in your situation.

 

5: Bankruptcy absolves you of all debt

This is false, as there are certain types of debts that cannot be discharged through bankruptcy such as student loans, child support and alimony payments, certain types of taxes and other secured debts. It’s important to speak with a qualified attorney to determine which debts may be discharged.

 

 6: Bankruptcy will stay on your credit forever.

This is false, as the effects of bankruptcy will remain on your credit for up to 7-10 years depending on the type of bankruptcy you file for. However, if you take steps to rebuild your credit and make timely payments, your credit score can improve over time.

 

 7: Bankruptcy is a sign of failure.

 This myth could not be further from the truth. The bankruptcy lawyer from California, will teach you how to check your credit score & make smarter financial decisions. Filing for bankruptcy is often a smart financial move that can help you get back on track financially and recover from debt. It’s important to remember that everyone’s financial situation is unique and filing for bankruptcy may be the best way to ensure that you don’t enter into a cycle of debt.

 

By understanding these seven myths about bankruptcy, you will be better equipped to make an informed decision regarding your financial future. Filing for bankruptcy can help provide much-needed relief from debt, but it’s important to speak with a qualified attorney before making any decisions. An experienced bankruptcy lawyer can provide guidance and help you determine if filing for bankruptcy is right for you.

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