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Common Bankruptcy Myths

California Bankruptcy Attorney

The subject of bankruptcy can be very misunderstood.  In today's economic climate, it has become more and more common for people to file for bankruptcy.  Despite the frequency of bankruptcy cases, a lot of people have misconceptions regarding the subject.  Some of the more common myths are:

Filing for bankruptcy will erase all of your debts.  This is not true.  There are a number of types of debts that cannot be wiped out.  Such debts include taxes, spousal support, child support and student loans.  There are other debts that will not be erased if you file for Chapter 7 Bankruptcy.

If you file for bankruptcy it will ruin your credit rating.  This is false.  The fact that you filed for bankruptcy will stay on your credit report for approximately 7 to 10 years.  This does not mean you will have a bad credit rating for 7 to 10 years.  You can ensure that your current bills are paid in full and in a timely manner.  This will begin to help restore your credit and the recovery process can be as little as 2 years.

Your house will be taken away from you once you file for bankruptcy.  This is not true.  Bankruptcy laws vary from state to state however every state has bankruptcy exemptions that protect a certain amount of equity on your home.  Many people do not file for bankruptcy for this one reason alone.  

If you file for bankruptcy creditors will still harass you.  This is also not true.  Once you file for bankruptcy your outstanding debts are put on hold.  There are very strict laws that creditors must adhere to.   Should you continue to be harassed by creditors, you may be able to sue them.

You can only file for bankruptcy once.  This is false.  If you have applied for bankruptcy in the past and it is necessary for you to do so again, then you can.  There are some stipulations regarding filing again that you must follow, however, you can eventually file for bankruptcy again.

It is hard to file for bankruptcy.  There is a lot of paperwork involved in filing for bankruptcy but it is not hard.  A California bankruptcy lawyer can certainly help ease the strain of having to go through the procedure on your own. 

While some of your questions may have been answered here, this by no means is intended to cover all of them.  When deciding the best course of action to take regarding filing for bankruptcy, we strongly recommend consulting a lawyer.  At Price Law Group, we know it can be a hard decision to make and we feel that you should not have to make it on your own.  Our attorneys have years of experience in the bankruptcy field and have successfully helped thousands of clients with their bankruptcy needs.

Contact a California Bankruptcy Attorney if you have any questions concerning common bankruptcy myths and need assistance during this difficult time.

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