Common Bankruptcy Myths

Filing for bankruptcy can be a daunting proposition. However, it can lead to a fresh financial start. There are many bankruptcy myths that the team at Oswalt Law Group want to help dismiss.

I Will Lose Everything

One of the most prevalent myths about bankruptcy is that the individual filing will lose everything he or she owns. In reality, bankruptcy law allows certain exemptions so you can keep important items, like your car or home, up to a certain value. You may also be able to keep much of your personal property. What you can keep and how much depends on the type of bankruptcy you file. For example, Chapter 7 bankruptcy may require you to liquidate some assets, like jewelry, to pay creditors.

My Credit Will Be Ruined Forever

Another common myth about bankruptcy is that your credit will be ruined forever. Many fear that if they file for bankruptcy, they will never be able to buy a house or a car and cannot get another credit card. The purpose of bankruptcy is to give you a fresh financial start and a chance to rebuild your credit. A bankruptcy will remain on your credit report for up to 10 years. While it may take some time to rebuild your credit and qualify to make a big purchase again, it will eventually happen if you make smart purchasing decisions and work to positively rebuild your credit rating.

I Will Be Seen As Financially Irresponsible

A more personal concern for those filing bankruptcy is that they will be seen as financially irresponsible. While there will always be abuse of the system, the majority of people who file bankruptcy do so because they have a serious personal problem such as losing their job, a divorce or a serious injury or illness. For example, statistics show that medical expenses are the leading cause of bankruptcy at 62 percent of cases. It is unlikely you frivolously spent your income. If you are facing high medical bills or have lost your job, bankruptcy can be a viable and productive action to take to help you rebuild your credit and financial state.

I Can Handle My Bankruptcy On My Own

Finally, one of the most common bankruptcy myths is that you can easily handle it on your own. Harassing creditors and overwhelming legal filings can be extremely stressful for someone who does not know how to properly handle a bankruptcy. Under such stress and without proper training, you are likely to make mistakes which can be extremely costly. The friendly and dedicated team at Oswalt Law Group in Phoenix understands the stress you are under and will work tirelessly to offer you outstanding legal representation throughout the entire bankruptcy process. Contact your Phoenix bankruptcy attorney at Oswalt Law Group today to get detailed information about how we can help you with your bankruptcy.