Go to Top

Top Bankruptcy Myths Exposed: What Are the Facts?

Blog Post Image

If you’re thinking about filing for bankruptcy, chances are you’ve done a little research on the topic. While the resources you’ve come across aren’t completely unreliable, they may not provide the clearest picture of how bankruptcy will affect you. The best way to learn about options available for your unique situation is to consult a Cleveland bankruptcy lawyer. An attorney can explain the different types of bankruptcy, review your personal finances, and provide advice about your best options.

If you’re considering bankruptcy and want to know more, contact a lawyer from Luftman, Heck & Associates at (216) 586-6600 to schedule a free and confidential consultation.

Common Bankruptcy Myths

While there is much information surrounding bankruptcy, these are some of the most common myths people come across:

Myth #1: Bankruptcy ruins your credit.
Fact: Filing for bankruptcy can actually help save your credit. If you’re so far in debt that you cannot stay current on your bills, chances are your credit has already taken a considerable hit. And while your credit score will lower when your bankruptcy discharge is awarded, you will have the opportunity to begin rebuilding it right away.

Myth #2: Filing for bankruptcy means you’ll lose your prized possessions.
Fact: Don’t assume that filing for bankruptcy means your house, car, and other personal assets will automatically be taken from you and sold. Personal bankruptcy does allow for some exemptions that can help you keep some of your property. If you have some belongings that you simply can’t part with, talk to a bankruptcy lawyer about how you can retain them after filing for bankruptcy.

Myth #3: The new laws make it nearly impossible to file for bankruptcy.
Fact: The 2005 bankruptcy laws were enacted to reduce the number of bad faith filings, but that doesn’t mean it’s too difficult for you to file. If you are a good candidate for bankruptcy, the court is not going to deny you. To best determine if you will qualify, consider talking to a lawyer and taking the means test.

Myth #4: If you’re married, your spouse must file, too.
Fact: You can choose to file individually, which is a good option if you carry more debt than your spouse. If, however, the two of you jointly hold a great deal of debt, you may want to consider filing as a couple.

Myth #5: You’re only filing for bankruptcy because you don’t know how to manage your money.
Fact: The reasons people file for bankruptcy vary, but it usually isn’t because they are simply bad with money. Often the root cause is a great financial strain, which can come from job loss, medical bills, or other issues. People may struggle for years trying to pay off debt before they turn to bankruptcy. If your bills are too large to handle, save yourself from that kind of stress and seek help right away.

A Cleveland Bankruptcy Lawyer Can Help

Even after doing your research, you may still wonder if filing for bankruptcy is the choice right for you. Cleveland bankruptcy lawyer Matthew Alden can guide you through the process. The team at Luftman, Heck & Associates can review your financial situation and debts, and help you make a decision regarding the next best steps. For a free consultation, contact us today at (216) 586-6600.