02
Sep

#4. Bankruptcy filers just don’t want to pay their bills. MYTH! Contrary to the stigma surrounding bankruptcy, a vast majority of our clients would love nothing more than to pay all of their debts. Unfortunately, those who wind up in our office are typically the victim of some unforeseen circumstance that is often times beyond their control – a lost job, a death in the family, an illness or injury. 

#3. Filing Chapter 13 looks better on your credit than filing Chapter 7 because you pay some of your debt back. MYTH! Although Chapter 13 can certainly help many people reorganize their debts in order to keep property they cherish, it does not necessarily do any more or less damage to your credit than Chapter 7. In some ways, it may be better to file Chapter 7 because you will be able to start rebuilding your credit much faster than you would if you filed Chapter 13.

#2. I can’t file bankruptcy because I have a car or home and I don’t want to lose my car or home. MYTH! A vast majority of bankruptcy filers are able to keep their house or car without losing the property. When filing Chapter 7, you can often keep your house or car as long as you are current on car payments. Chapter 13 can also restructure your car notes and help you catch up on missed house payments in order to keep that property. Many times, the ONLY way someone will be able to keep their property is to file for bankruptcy protection.

#1. I will never be able to have credit again after filing for bankruptcy. MYTH! Many of our clients have found that their credit repayment history after their bankruptcy has determined their new credit score more than the actual bankruptcy filing has. You should be able to rebuild your credit within 2-3 years after the close of your bankruptcy case so that you can get financed as though the bankruptcy never even happened. We often recommend you contact a credit counseling agency after your bankruptcy so that you can explore your options for rebuilding your credit.

For more information on bankruptcy, please visit www.kansascitybankruptcyfirm.com/ or contact your Kansas City Bankruptcy Lawyer, Betsy Lynch at 816.434.6616.

 

One Response to BANKRUPTCY MYTHS

  1. The blog has talked about some common bankruptcy myths in a very nice way. Here I just want to add one more common misconception attached with bankruptcy. It is believed by many of you that bankruptcy hurts your credit score permanently. It is true that bankruptcy hurts your credit very badly but it stays in your credit report for 7 to 19 years. Even 2 to 4 years after getting bankruptcy discharge, you can obtain a new loan. Sometimes, even one year after bankruptcy discharge, you may be eligible for getting a new loan. Though in that case, you will be charged more rate of interest.

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