DISPELLING COMMON BANKRUPTCY MISCONCEPTIONS
Feb. 10, 2022
Many people who fall deep into debt have concerns about filing for bankruptcy. It is true that the decision to seek bankruptcy should never be made without consideration. Unfortunately, some people do not even consider filing for bankruptcy because of the misconceptions surrounding bankruptcy filings.
Depending on your circumstances, filing for bankruptcy can be a fantastic debt relief option. However, you need to be certain that you are making the right choice. At Bond Law Office, our bankruptcy attorney is prepared to review your particular case and determine if filing for bankruptcy would be the best debt relief option in your specific situation. We help people navigate the bankruptcy process in Fayetteville and Fort Smith, Arkansas, as well as throughout the River Valley.
The Most Common Bankruptcy Misconceptions
There are a number of misconceptions about bankruptcy law. While some of the misconceptions arise because of the lack of understanding of bankruptcy law, others are spread by creditors to take advantage of vulnerable debtors. Below is the list of some of the most common misconceptions about bankruptcy filings.
Filing for bankruptcy will ruin a debtor’s credit forever. In fact, the opposite is true. By seeking debt relief through bankruptcy, you can improve your credit over time because you can discharge your debts and get a fresh financial start. However, you will have to work hard to rebuild your credit after the bankruptcy filing.
Bankruptcy will discharge all debt. Many debtors file for bankruptcy thinking it will discharge all of their debts. However, that is a major misconception. The debts that can be discharged through bankruptcy vary under each chapter. Typically, not all debts are eliminated when filing for bankruptcy.
A debtor will lose all of their possessions once they file for bankruptcy. False. Debtors can benefit from federal and state exemptions that allow them to keep certain types of property. Federal and state laws do impose limits on property exemptions, which is why you might want to consult with an experienced bankruptcy attorney to find out how much property can be exempted.
It is extremely difficult to get debt relief through bankruptcy. While it is true that bankruptcy laws set forth certain eligibility requirements, getting debt relief through bankruptcy is a relatively straightforward process. A knowledgeable bankruptcy lawyer can help you navigate the filing process from start to finish.
Debtors cannot file for bankruptcy a second time. It is not true that you can only file for bankruptcy once. In fact, debtors can file for bankruptcy as many times as they want as long as the mandatory waiting period between bankruptcy filings has passed.
Debt consolidation is always better than filing for bankruptcy. Not necessarily. Whether or not a debtor should consider filing for bankruptcy or combining debts into a new loan depends on the types and amounts of debt and other circumstances. However, filing for bankruptcy is often the most beneficial debt relief option for debtors.
Debtors cannot stop creditor harassment by filing for bankruptcy. On the contrary, filing for bankruptcy is one of the most effective ways to stop creditor harassment. When a debtor files for bankruptcy, their creditors must stop all collections actions immediately. Creditors who continue harassing debtors can be sued by the debtor.
Debtors who file for bankruptcy will never qualify for a mortgage. Many people mistakenly believe that debtors who file for bankruptcy will never be able to qualify for a mortgage or even get a credit card. Debtors can get a mortgage after bankruptcy. However, the waiting period to qualify for a mortgage after a bankruptcy is dismissed or discharged depends on the type of bankruptcy and the loan type.
Contact an Experienced Bankruptcy Attorney
Do not let misinformation and misconceptions about bankruptcy ruin your life. Some of the misconceptions are spread by creditors to deter debtors from even considering bankruptcy as a debt relief option. If you struggle with debt, it is time to have an open conversation about your options.
Speak with our bankruptcy attorney at Bond Law Office to talk about your options. We provide legal counsel to clients throughout Arkansas, including Fayetteville, Fort Smith, and the Arkansas River Valley region. Schedule a case evaluation with our experienced bankruptcy attorney to find out if filing for bankruptcy is the right choice in your specific case.