TEXAS BANKRUPTCY ATTORNEY: BANKRUPTCY MYTHS:
There is a lot of content on the internet about bankruptcy. From my regular internet searches on the subject, I estimate that ten percent of bankruptcy content is posted by bankruptcy attorneys who usually know what they are talking about. The rest of the information on the internet is confusing, misleading, and incorrect. I imagine most people that need financial help become very confused at the amount of misinformation they find online. Here I’ll try to address some of the common myths about bankruptcy.
Myth no. 1: You will lose everything! Most of my clients lose nothing, except maybe a sense of hopelessness and an inability to sleep at night. Your assets are protected from creditors in bankruptcy by laws called exemptions. Exemptions allow bankruptcy filers to get relief from their debt without giving up their things. In Texas, we have great exemptions. Most of my clients lose nothing when they file bankruptcy.
Myth no. 2: It’s difficult to file bankruptcy. Yes, this is true. Hopefully you will have an experienced bankruptcy attorney to guide you through the process. If you do you will probably find that your part of the process is fairly easy, and your bankruptcy attorney takes care of the difficult parts for you.
Myth no. 3: Filing bankruptcy means you are a bad person. Nonsense. I have represented thousands of clients in bankruptcy cases and I have yet to represent a bad person. Most of my clients have been unlucky (job loss, sickness, income affected by poor economy) or taken advantage of by predatory lending (adjustable rate mortgage, credit cards with small print and high fees). If those things make you a bad person, then there are no good people, because at some point in each of our lives we all face these types of challenges.
Myth no. 4: You will never be able to borrow money again. Lenders make the decision to loan money largely based upon the applicant’s credit score and report. Luckily for those of us with poor credit ratings, credit reports have a way of improving over time, if you don’t make bad financial decisions in the future. Filing bankruptcy helps to remove a lot of the negative marks on a credit report. After discharge, if you pay your bills on time and keep your balances low, your credit rating will improve. Even bankruptcies come off of a credit report eventually. After discharge you should be better off financially than you were before filing, and soon after your ability to obtain credit should improve as well.
Myth no. 5: Everyone will know you filed for bankruptcy. It is true that a bankruptcy filing is a matter of public record. However, the number of filings each year is in the millions, and most people do not have access to the type of databases needed to determine if you filed bankruptcy. In most cases the only people that will know you filed bankruptcy are the people you choose to tell.
I’ll leave you with one last piece of advice. If you are interested in filing bankruptcy, speak with an experienced bankruptcy attorney. Most bankruptcy attorneys do not charge their clients for the initial consultation, so getting advice about your situation from an attorney is usually free.
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