Three Common Bankruptcy Myths and Why They Are Not True

There are many myths about bankruptcy and these myths often why people postpone filing. Unfortunately, the longer they wait to file the worse their financial situation becomes. Before you decide whether bankruptcy is right for your situation, consider a few of these myths. Have you been led to believe bankruptcy will create any of the following scenarios? Knowing the truth can help you make an informed decision about bankruptcy.

Myth #1: Creditor harassment will be Unbearable if I File for Bankruptcy!

The exact opposite is actually true. Chances are if you have fallen behind on bills and are considering bankruptcy, creditors are currently at your doorstep. Endless letters and calls from creditors are often what triggers people to consider filing for bankruptcy.

Once you file, you receive an “automatic stay.” This means creditors are put on hold until the situation is resolved and by law, must end direct contact with you. Bankruptcy laws prohibit creditors from attempting to collect any debt while a person is in the process of filing for bankruptcy. The legal system is so insistent debtors be left alone once they take action, there are penalties in place to punish any creditors that continue to contact debtors once they have filed.

Myth #2: I Will Lose all Control of my Finances Forever if I File for Bankruptcy!

Though bankruptcy does result in your giving up some control, it is intended to help you get back on track – not punish you forever. And if you are considering bankruptcy, how much control do you really have over things at the moment?

Once you file, you will be assigned a trustee that is responsible for ensuring creditors are paid. In some cases, the trustee’s job is to sell assets in an estate. In other cases, such as Chapter 13 bankruptcy, the process only reorganizes debt and allows the debtor to keep most of his or her assets. There are also ways to protect assets in Chapter 7 bankruptcy filings.

Your specific case determines how much control you have over your assets and your finances moving forward. And in the future, you will certainly be in better shape than had you let the problem continue without taking action.

Myth #3: My Credit is Ruined Forever!

Bankruptcy is actually one of the quickest ways back to healthy credit when your financial situation is in disarray. Some banks specialize in offering credit to high-risk clients, which can help you build your credit quickly once your bankruptcy is settled. In some cases, debtors can be eligible for mortgage loans in just a few years after filing for bankruptcy.  The Law Offices of Robert M. Geller can help repair your credit after bankruptcy.

The key is to create financial stability after your bankruptcy. Just because a bankruptcy is on your credit report does not mean you are forever damaged. You must take action to resolve your current problems and work hard to avoid problems in the future.

Are you considering bankruptcy, but you are concerned about everything you have heard in the past about the process? The Law Offices of Robert M. Geller, P.A., can help. Call us today at 813-254-5696 to schedule a free consultation.