Debunking Common Myths About Filing Bankruptcy

As with many facets of the law, filing bankruptcy comes with its own set of myths and negative connotations. Filing bankruptcy is intimidating enough without all the myths about bankruptcy flying around. This misinformation could cause some people to avoid filing even if they may need to file for bankruptcy. Here at RGG Law, we make sure our clients are well informed on the process. Today, we’re busting some of these common myths, so you can file with confidence.

My Credit Score Will Be Ruined

This is usually the first myth that comes to mind when people hesitate to file for bankruptcy. While it’s true that bankruptcy stays on your credit score a number of years, it doesn’t prevent you from rebuilding credit, and it doesn’t make your score take a dive. The fact is, your credit was probably not very good if you needed to file bankruptcy, and bankruptcy gives you the best chance to start rebuilding your credit score.

You’ll Lose Everything

There’s a common misconception about filing bankruptcy that says when you file, they take everything. Not only is this false and misleading, the opposite is sometimes the case. Filing bankruptcy may prevent your assets from being seized. When you file, you’ll be granted an automatic stay, which basically prevents collectors from repossessing your assets.

Max Out Your Credit Cards

Along with myths about the downsides of bankruptcy comes myths about the upsides. Some people think filing bankruptcy is a get out of debt free card. They assume they can just max out all their credit cards, file, and be absolved. This is NOT a good idea. While it’s true that bankruptcy will relieve some debts, it will not relieve debts that you obviously racked up recently. In fact, doing this is considered fraud, and you could be in a lot worse of a position than you were.

You Can Only File If You’re Completely Broke

Sometimes people think that they have to wait until they’re completely broke to file for bankruptcy. This is actually an irresponsible approach. If you’ve been having trouble paying your bills and you think there’s no way out, you should file for bankruptcy. Don’t wait until the bills pile up and overwhelm you.

Let RGG Law Help You with Filing Bankruptcy

Filing bankruptcy is a tough decision and can be an overwhelming process. Let the bankruptcy lawyers at RGG Law help you decide if bankruptcy is the right choice for you. Contact us today to schedule a free consultation.