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Common Bankruptcy Myths

There are several myths and misconceptions associated with filing for bankruptcy, all of which might turn someone away who is need of debt relief. 

Myth:  Only losers file for bankruptcy.

This is absolutely not true.  The recession has forced many companies across the country to layoff good, hard working employees.  In turn, many people have fallen on hard economic times and into debt they can no longer manage. Bankruptcy was created to help people who have fallen into inescapable debt, and there is no shame in filing for bankruptcy if you are struggling.

Myth: I am going to lose my home and car if I file for bankruptcy.

This is false. Although certain assets might be liquidated, many are protected by bankruptcy laws, and it is EXTREMELY rare when a person loses their home or vehicle. Homes, heirlooms, and retirement savings are just some of the assets that are typically protected from liquidation during bankruptcy.

Myth:  I won’t be able to obtain new lines of credit after filing for bankruptcy.

This is false. Although a bankruptcy will remain on your credit report for 10 years, many people are able to open new lines of credit within months after their petition has been discharged. In fact, now that you are debt-free, creditors may be more willing to offer you new lines of credit, just at a much higher rate. 

Myth:  Filing for bankruptcy is a difficult, complex process.

Although bankruptcy might seem confusing, the process of filing for bankruptcy is quite easy, especially when you have an experienced bankruptcy attorney guiding you each step of the way.

Myth: I will lose my job if my boss finds out I filed for bankruptcy.

False. There is no law that states an employer must be notified when an employee files for bankruptcy. Unless you tell your employer yourself, the only way your employer could possibly found out if you filed for bankruptcy is if he or she searched the public record.  And should your employer fire you solely because you filed for bankruptcy, you will have grounds to pursue a wrongful termination lawsuit.

If you have any additional questions or concerns about bankruptcy, the bankruptcy process, or life after bankruptcy, an experienced Los Angeles bankruptcy lawyer at the Law Office of Teresa Beyers would be more than happy to speak with you.  To schedule a consultation, please contact the office today by calling (213) 236-4400.

Categories: Bankruptcy