Bankruptcy Myth – Time to Clear the Air

Almost everyone believes in at least one Bankruptcy Myth below. From losing your house to being a deadbeat bankruptcy myths exist everywhere. Hopefully this blog will remove some of these Bankruptcy Myths.

Chapter 7 Bankruptcy means I lose everything I own.

This is simply not true. Under Federal exemptions or under Texas exemptions people who file for bankruptcy get to keep their exempt property. A bankruptcy attorney determines how to maximize what people can keep when they file for bankruptcy. In fact, most times an individual will use the Texas exemptions to help keep more of their property. These things include: homes, cars, furnishings, bank accounts, retirement, guns, etc.

I won’t have any debts after filing Bankruptcy

 In some cases this is true, however, in many cases this is not true. If you have a mortgage or car loan and you want to keep your house or car you will still have to pay those loans. Student loans rarely are discharged. Some taxes will not be discharged either.

I won’t be able to get credit again

Though it will take some time, it is possible to get credit again. Bankruptcies also only stay on your credit report for 7-10 years. In some cases you may have to get secured credit and perhaps pay higher interest than other people do, but it is possible to get credit after a Bankruptcy. Some examples of secured credit are: auto loans and secured credit cards.

People will think I’m a deadbeat if I file

Wrong! This is perhaps the worst Bankruptcy Myth. Everyday, normal people file bankruptcy. Rich people file bankruptcy too. Everyone has a situation they are in and sometimes the only way to get out of it is to file bankruptcy.