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3 Common Bankruptcy Myths

On Behalf of | Feb 19, 2020 | Uncategorized |

Financial difficulties can leave you feeling stressed and anxious. While bankruptcy provides relief from crippling debt, the social stigma surrounding it may cause you to hesitate when considering it. Complex emotions surround bankruptcy, and just thinking about it can be overwhelming.

However, bankruptcy is not a bad thing. In fact, it can help you get a fresh start. Looking at the facts provides a clearer understanding of bankruptcy’s benefits, as well as what it truly means for you in your day-to-day life.

 What are 3 bankruptcy myths?

Before filing for bankruptcy, negative thoughts about the process may fill your mind. Take the time to address some of your concerns by learning the truth behind common misperceptions. Three frequently discussed myths related to bankruptcy include the following:

1.Filing for bankruptcy signifies you’ve failed: Nobody expects to find themselves facing financial disaster. If it occurs to you, you might feel ashamed, embarrassed or like a failure. The social stigma surrounding filing for bankruptcy can make you hesitant to declare it. However, you should view it as an opportunity to improve your life and protect your future. Chances are the reasons behind your economic struggles derive from unexpected circumstances beyond your control, such as a sudden onset of illness, job loss or relationship changes. Be kind to yourself throughout the bankruptcy process and know it could happen to anyone.

2. You’ll lose all your property: Bankruptcy doesn’t exist to punish you, but instead aims to provide you with hope for the future by offering you an option to repay your debt that doesn’t leave you penniless. Exemptions built into the law allow you to keep certain property. Examples of property you may be entitled to keep include retirement accounts, clothing and other personal property, your vehicle, household goods and even your home in certain instances.

3. You’ll never have good credit again: It’s no secret filing for bankruptcy can harm your credit score. Yet, if you find yourself in a situation where you’re considering bankruptcy, your credit score may not have been that good to begin with. Furthermore, being proactive and seeking to regain control of your finances can show you as a better credit risk to some lenders. This is because you’ll be unable to file for bankruptcy again for some time.

Who knows the truth behind bankruptcy?

While these are just a few of the myths surrounding bankruptcy, many more still exist. At Mariano & Coiro, P.C., we have a keen understanding of these misconceptions and want to offer you the reality behind them. We encourage you to feel confident in your decision and look forward to a debt-free future. To speak with a member of our team, call us at 732-860-7620 or email us.