As a sensitive topic, bankruptcy is often shrouded in many myths and misconceptions. Our friends at Pioletti Pioletti & Nichols, seasoned bankruptcy lawyers, are here to debunk these common misunderstandings and provide clarity on the subject. Let’s explore some of the prevalent myths and set the record straight about bankruptcy.
Myth 1: Bankruptcy Is Only For Irresponsible People
One of the most common misconceptions is that only financially irresponsible individuals or those who have mishandled their money file for bankruptcy. Often, unexpected twists and turns can lead to a person needing to file for bankruptcy. Bankruptcy is a legal remedy designed to help individuals and businesses regain control of their finances after facing overwhelming debt due to circumstances beyond their control.
Myth 2: You’ll Lose Everything In Bankruptcy
People also fear that bankruptcy will also strip them of all of their money and belognings, leaving them with nothing. Bankruptcy laws provide exemptions that allow you to protect certain assets. The goal is to help you maintain essential items, such as your home, car, and personal belongings while resolving your debts.
Myth 3: Bankruptcy Ruins Your Credit Forever
While bankruptcy does have an impact on your credit score, the notion that it ruins it forever is a misconception. In fact, many individuals see an improvement in their credit after filing for bankruptcy. Working with an attorney and the right financial team can help you rebuild your credit.
Myth 4: You Can Choose Which Debts To Include
Another common myth is that you can selectively choose which debts to include in your bankruptcy filing. Bankruptcy laws generally require you to disclose all of your debts. While some debts may be discharged, others, like student loans and certain tax obligations, are more challenging to eliminate. Your bankruptcy lawyer will help you navigate these complexities and ensure compliance with the law.
Myth 5: Bankruptcy Is A Quick Fix
It’s important to remember that bankruptcy isn’t a fix-all solution. Depending on the type of bankruptcy you file, the process can take several months or even years to complete. It’s essential to have realistic expectations and be patient as you work through the legal procedures with the guidance of a bankruptcy lawyer in Springfield.
Myth 6: You Can Only File For Bankruptcy Once
There’s actually no strict number of times that you can file for bankruptcy. However, there are waiting periods between filings, which vary depending on the type of bankruptcy and previous cases. Your attorney can help you determine your eligibility for filing after a previous bankruptcy.
Myth 7: All Debts Are Dischargeable In Bankruptcy
Bankruptcy can’t dissolve all debts. Debts such as child support, alimony, most tax obligations, and student loans are typically non-dischargeable. A skilled Springfield bankruptcy lawyer will help you understand which debts can be eliminated and which will remain.
Knowing and dispelling the myths of bankruptcy can help you be in a better place should you find yourself in financial trouble. Bankruptcy can provide relief and a fresh start for individuals and businesses facing insurmountable debt. With the guidance of a qualified bankruptcy lawyer, you can navigate the process with confidence, knowing that you’re taking a significant step toward regaining control of your finances.