Yes, one common myth related to bankruptcy is that it provides you with a completely clean financial slate. That's not true for everyone, and not all debts can be discharged during bankruptcy. Even so, a Chapter 7 filing can help you start with a much fresher slate -- one that is manageable and can lead to a more stable financial future. But many people put off finding out about bankruptcy because they believe other myths.
Many people believe they'll have to give up all their property if they file bankruptcy. While some of your assets might be sold to help pay off creditors, you do get to keep many of your personal belongings such as clothing, appliances and other household goods. You even usually get to keep a certain amount of electronics, family heirlooms and jewelry, though each case is a bit different.
Even more important, many people can keep their home and vehicles during bankruptcy. In fact, bankruptcy can be a way to help you keep this type of property as it puts an automatic stay in place that stops foreclosure and repossession procedures, at least temporarily.
Another reason many people avoid bankruptcy at all costs is because they believe it will ruin their financial reputation for the future. Yet, bankruptcy does make it more difficult to get credit in the short term. But many people who go through bankruptcy see an improvement to credit scores in the following years as they are able to make payments on debt and stop defaulting on loans or running behind on other payments.
Understanding how bankruptcy might help you is important to making a viable financial decision. Don't let bankruptcy myths keep you from learning more about this option -- our firm is ready to offer assistance and information.