6 Myths About Bankruptcy Resolved

The purpose of this article is to provide some clarification as it relates to certain misconceptions associated with the bankruptcy process.  The following myths about bankruptcy will be addressed below:

Myth 1: Filing for Bankruptcy Means You’re Irresponsible

The first misconception that needs to be addressed is that filing for bankruptcy means that you are an unproductive member of society and you’re merely seeking to shirk your financial responsibilities.  The fact remains that millions of Americans file for bankruptcy each and every year.  Often, good hardworking people are faced with insurmountable medical bills or debt that has just accumulated over time.  Bankruptcy is designed to provide such individuals with a fresh start and provide freedom from the financial burden associated with debt.  The U.S. Bankruptcy Code was put in place to help honest hardworking Americans who have simply fallen on hard times.  There is no shame associated with filing for bankruptcy.

Myth 2: Bankruptcy Further Damages Your Credit

Another common misconception associated with the bankruptcy process is that filing for bankruptcy will harm your credit.  More often than not, by the time you consult with a bankruptcy attorney, your credit is already marginal at best.  The bankruptcy process can actually help rehabilitate your credit.  By filing for bankruptcy, you are able to discharge all of your unsecured debt.  Thereafter, you will be offered credit by various credit card companies because of the fact that all of your old debt has been discharged.  So in essence, filing for bankruptcy is the first step to rebuilding your credit.

Myth 3: Filing for Bankruptcy is Too Difficult

Often times individuals are frightened of the bankruptcy process because they feel that it is much too complex to accomplish.  The bankruptcy process is actually quite simple if it is handled by an experienced bankruptcy attorney.  If you have any questions concerning the process of filing for Chapter 7 or Chapter 13 bankruptcy in New Jersey, you can feel free to contact the bankruptcy attorneys at Villani & DeLuca, P.C. who offer free bankruptcy consultations to new clients.

Myth 4: You Can’t Own a Home or Car After Bankruptcy

Another myth about the bankruptcy process is that subsequent to the filing, a person will never be able to own a home or car in the future.  As indicated above, the bankruptcy process often helps in rehabilitating your credit score and, more often than not, individuals who file for bankruptcy and get relieved of their substantial debts are able to reestablish their credit and subsequently purchase additional homes and vehicles within 2 to 4 years after the bankruptcy filing.

Myth 5: Everyone Will Know You’ve Claimed Bankruptcy

A common fear for those in financial trouble is that, if they file for bankruptcy, everyone in their community will find out.  Typically, the only people who are made aware of your Chapter 7 or Chapter 13 bankruptcy filing are your creditors and any individuals who you choose to tell.  While a bankruptcy filing is a matter of public record, the number of filings are so significant (in excess of 1 million filings per year) it is extremely unlikely that someone will have knowledge of your bankruptcy claim.  You may be quite surprised as to the number of prominent citizens including doctors, lawyers, politicians, etc. who have filed for bankruptcy in the past.  The fear of being somehow exposed for doing something that is permitted by federal law is, quite frankly, irrational.

Myth 6: You Will Lose Everything You Own in Bankruptcy

Lastly, people are often afraid that if they file for bankruptcy they’ll lose all of their possessions.  Once again, this is another misconception that is untrue.  Each state has certain exemptions that protect various forms of property from bankruptcy, such as your primary residence, your motor vehicle, your household goods and furnishings, retirement accounts and wages.  Each circumstance is different though, so speaking with an attorney about your scenario is advised.

Call a NJ Bankruptcy Attorney Today With Questions

In the event that you are facing financial trouble and feel that bankruptcy may be a viable alternative, please contact an experienced Ocean County bankruptcy lawyer at the law offices of Villani and DeLuca, P.C. today.  Villani & DeLuca is conveniently located in Point Pleasant Beach, New Jersey and has filed bankruptcy petitions for residents throughout all of Ocean County and Monmouth County, including but not limited to Jackson, Toms River, Lakewood and Brick Township.  The law offices of Villani & DeLuca, P.C. are open Monday through Friday from 9 to 5 p.m. and evening appointments are also available upon request.  Please call (732) 965-3390 today to schedule your free consultation.