5 Bankruptcy Myths That Keep People from Seeking Debt Relief

Far too many people continue struggling with debt because they are afraid of how bankruptcy might affect them in the future. There are all kinds of myths out there about how bankruptcy means you lose everything and leaves you with terrible credit that can never be repaired. In reality, bankruptcy’s bad reputation is based on kernels of truth mixed with a lot of misinformation.

As experienced Georgia bankruptcy lawyers, we often hear these common bankruptcy myths when talking with prospective clients. Here is why they are untrue:

Myth 1: Bankruptcy Permanently Ruins Your Credit

While bankruptcy stays on your credit history for up to 10 years, its effect lessens over time. We have seen clients obtain low-limit secured credit cards as little as six months after a bankruptcy discharge, and some people can qualify for mortgage loans in only two years. The key to rebuilding credit is to use bankruptcy to get a clean slate and then keep it clean by paying all your bills on time going forward.

Myth 2: You Lose Most of Your Property in Bankruptcy

Bankruptcy is designed not as a punishment but rather as a way to get you back on your feet. Although some assets may be sold off in rare circumstances because the law provides for exemptions which allow bankruptcy filers to retain certain property that will come in useful as they rebuild themselves financially. In the vast majority of personal bankruptcy cases, debtors are allowed to keep all of their property.

Myth 3: Filing Bankruptcy Means You Are Financially Irresponsible

There seems to be a stigma associated with filing for bankruptcy, where people assume they will be seen as being unable to manage their finances. In reality, the most common reasons for bankruptcy are serious illness, job loss and divorce. These problems can befall anyone, no matter how good they are with money.

Myth 4: You Can’t File for Bankruptcy if You Have a Job

Eligibility for bankruptcy is based on your inability to repay your existing debts. Your job status and wages are among many factors that the courts consider, either as part of the means test to file under a Chapter 7 or to determine availability of a Chapter 13 debt reorganization.

Myth 5: You Can’t File for Bankruptcy if You Are Married

Bankruptcy laws allow married people to file individually or jointly. If you are married, your own bankruptcy need not involve your spouse except for debts for which you are jointly liable. Your Georgia bankruptcy attorney will be able to advise you on the best approach to take.

If you live in the Atlanta area and have been putting off filing for bankruptcy, call Jeff Field & Associates for help. Our attorneys will give you honest advice on whether filing is a good idea. To schedule a consultation, please call 404-381-1278 or contact us online. We have offices in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale for your convenience.