The term bankruptcy tends to evoke much opinion and emotion. Many Americans hold a bleak image of bankruptcy and those who declare it. For most, their belief in bankruptcy is clouded by numerous misconceptions concerning both the process and those who utilize it. We have all likely heard some of the following “facts” about bankruptcy, such as: bankruptcy will ruin your credit forever; you will lose everything if you declare bankruptcy; only disreputable people declare bankruptcy; and bankruptcy is too difficult to pursue. The reality is, however, for millions of Americans struggling to stay afloat in the midst of oppressive debt, bankruptcy provides a fresh start without the negative repercussions many accept as reality without researching.
The Following is a List of the Top Myths Concerning Filing For Chapter 7 Bankruptcy
It is our hope that in debunking these misconceptions, you can form an accurate picture of the bankruptcy process and make an informed decision as to whether bankruptcy might be right for you:
Myth #1: Bankruptcy will destroy your credit for life—this myth seems so ingrained in the American psyche that it is rarely even questioned. However, it is grossly inaccurate. Bankruptcy will significantly impact your credit, causing a drop in your credit score of 200 points or more. For 10 years following the date on which you declare bankruptcy, it will be visible on your credit report. However, you can begin to rebuild your credit immediately after filing for bankruptcy, and achieve good credit in as few as two years. For many debtors, bankruptcy will actually be the quickest way to achieve good credit. When you are behind on bills, this information is continuously provided to the credit agencies, damaging your score constantly. When you file for bankruptcy, all negative reporting stops and you obtain the chance to build positive credit.
Myth #2: Filing for bankruptcy is too difficult to pursue—while bankruptcy will involve much paperwork and planning, a knowledgeable bankruptcy attorney will make the process smooth and simple. An attorney with experience in the field will be able to answer all of your questions and navigate you seamlessly though the process to completion.
Myth #3: You will lose everything if you declare Chapter 7 bankruptcy—there seems to be a common belief that by declaring bankruptcy under Chapter 7, you will lose your home, car, jewelry, personal effects, and most other property. The reality is that many of these possessions are in fact considered exempt, and therefore not subject to seizure. Exemptions vary by state, but some of the most common include: motor vehicles, up to a certain value; your homestead; earnings of the head of household; life insurance; reasonably necessary clothing, household furnishings, or goods; appliances; personal effects; pension; tools of your trade or profession; and public benefits. With proper planning, your bankruptcy attorney can help to protect those assets you value most.
Myth #4: Only disreputable or unsuccessful people declare bankruptcy—some of our world’s greatest thinkers, inventors, sports players, talk show hosts, and leaders have declared bankruptcy and went on to astonishing success. Take a look at the following list of individuals: Abraham Lincoln, Mark Twain, Walt Disney, Burt Reynolds, Henry Ford, Mickey Rooney, Larry King, and Willie Nelson. These individuals all share three traits: 1) they achieved great financial success, 2) they achieved fame, and 3) they declared bankruptcy. Millions of hardworking Americans turn to bankruptcy each year. Most of these individuals are not in debt because they refuse to work, spend frivolously, or make poor financial decisions. Rather, they are victims of a poor economy and lagging job market.
New Jersey Chapter 7 Bankruptcy Attorney Andrew M. Carroll is committed to ensuring each of our clients receives unparalleled legal representation. Attorney Carroll will fully explore your bankruptcy options and select the best means of helping you achieve a bright financial future. Call us today at (609) 400-1302 to schedule your free debt relief and chapter 7 bankruptcy consultation.