Bankruptcy Myths and Facts

There are many myths about bankruptcy that cause those who are considering filing to think twice. This is unfortunate because bankruptcy can be a great solution for those who are struggling with uncontrolled debt or facing foreclosure, vehicle repossession and other problems related to lack of income or too many liabilities. Oswalt Law Group in Phoenix works with those who want answers and options to deal with insurmountable debt. Here are some common myths about bankruptcy along with the facts about what this process truly involves.

Myth: People who file bankruptcy cannot get credit again, purchase a home or buy a car.

Fact: Once your bankruptcy is discharged, you are free to open any credit accounts you wish. You will probably find that creditors are more hesitant to loan you money and will probably require you to gradually rebuild trust with them by opening pre-paid credit card or other guaranteed loan accounts first. However, as you make your payments on time, you will find that creditors are more willing to give you a chance. Eventually, your credit will be repaired to the point that you can buy a home, a car or anything else you like just as those who have never filed bankruptcy can do.

Myth: Bankruptcy discharges do not protect you from creditors.

Fact: If a debt can be discharged, a creditor cannot pursue payment at a later date. Some debts are not dischargeable under bankruptcy, however, so it is important for you to understand which debts will be taken care of by bankruptcy and which will not.

Myth: Bankruptcy is an expensive and difficult process that can take years.

Fact: Bankruptcies require a certain amount of time to close or “discharge,” but that time does not necessarily have to be long. Instead, Chapter 7 bankruptcy can often be discharged in a matter of months. Chapter 13 plans may take up to five years to reach discharge, but during this time the debtor makes payment to the bankruptcy trustee. As for the expense, bankruptcy fees are often far less than trying to pay bills, so many people find that the bankruptcy filing gives them some breathing room.

Contact Oswalt Law Group to learn the facts about bankruptcy and whether it is the right decision for you. The helpful attorneys at the Oswalt Law Group in Phoenix are ready to work with you on your bankruptcy issues.