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Bankruptcy FAQ

Debunking the myths of bankruptcy

On Behalf of | May 10, 2017 | Chapter 7

Bankruptcy carries many stigmas with it. People view bankruptcy in a certain way and they have been conditioned to think of bankruptcy as the desperate last act of an irresponsible person. However, this is a myth. Many of the preconceived notions that people have about bankruptcy are actually untrue — or aren’t as severe as you may think they are.

So what preconceived notions are we talking about? Let’s take a look at a few:

  • “If I file for bankruptcy, it is proof that I am immoral or a failure.” Most people will immediately resist the idea of filing for bankruptcy out of fear that it makes them a bad person. But this simply isn’t true. Bankruptcy does not make you a failure. It also doesn’t make you a morally dubious person. Instead, bankruptcy is a tool to get you out of an untenable financial situation. You shouldn’t feel guilty for using it.
  • “If I file for bankruptcy, all of my assets and property will be taken away by repo men.” Again, this simply isn’t true. You may lose assets through liquidation, but there are strict rules and process that must be followed before bankruptcy even gets to that point. There won’t be a truck that randomly pulls up to your house without warning and has moves in it ready to take all of your stuff.
  • “If I file for bankruptcy, my credit score will never recover.” Filing for bankruptcy may hurt your credit score, but you can certainly recover from it. Just like anything in this world, it will take work and care.

People who file for bankruptcy have rights, and their filing is a way for them to solve a critical financial problem that they have. Bankruptcy should not be viewed as a devious or improper legal tool. It is a solution to a problem.