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Debunking Bankruptcy Myths

Myths and Misconceptions

Hiring a lawyer will only add to my mounting debt.

We understand the financial pressure you are under and will devise repayment plans that will work for you. If you are filing for Chapter 13 bankruptcy, you may be able to incorporate your legal fees into the debt reorganization.


I will have to spend a great deal of time in court.

Most bankruptcy cases never end up in court. In most cases, you will never have to appear before a judge or jury.


I’ll never be able to obtain credit after bankruptcy.

After bankruptcy, most of your debt is cleared. Credit card companies will see you as a much better credit risk than someone who continually has debt. Our center can put you into contact with bankruptcy-friendly lenders.


My credit record will be irreparably damaged.

A credit record is damaged through the inability to make or meet minimum monthly payments, not through filing for bankruptcy. After bankruptcy, as long as you are responsible with subsequent cards, your credit score will actually improve.


I’ll never be able to buy a car or home after bankruptcy.

Because you should be able to obtain credit following a bankruptcy, you should have little difficulty in making important purchases such as buying a house or car. You should also have very little trouble renting an apartment.


Declaring bankruptcy makes me look like a bad person.

This perception is completely false. Congress designed bankruptcy laws to help people with acute financial problems to make a new beginning. Emerging from debt is far better than remaining in debt and worsening your situation.


I can file for bankruptcy without the help of an attorney.

While this statement is technically true, it is not advisable to file on your own. An experienced bankruptcy attorney can apprise you of opportunities and pitfalls that you may not be aware of. In addition, a lawyer can ensure your bankruptcy is handled smoothly and efficiently.


I can eliminate debt through a debt counseling service without having to declare bankruptcy.

A debt counselor can only help you reorganize debt and try and negotiate plans with creditors. This does not put an end to harassment, nor does it completely eliminate the debt. An attorney helping you to declare bankruptcy can put an immediate stop to harassment, foreclosure and repossession.


Student loans and taxes are never discharged in bankruptcy.

In very specific circumstances, student loans may be included in the liquidation of debt. Also, when declaring Chapter 13, you may include student loans in your repayment plan, which can save you money.


Congress has made it impossible for the ordinary person to declare bankruptcy.

While recent bankruptcy legislation has made Chapter 7 bankruptcy filing a more difficult option to qualify for, you may still be able to qualify for Chapter 13 reorganization bankruptcy. Call us for a consultation to discuss your options.