The decision to file for bankruptcy can be heartbreaking and stressful. It is particularly so for people who have been given misinformation about the process and the consequences or who believe some of the common myths about bankruptcy.
One of the most alarming myths states that when you file for bankruptcy you will lose everything, your house, your car, your investments, even your retirement accounts.This is simply not true. The goal of bankruptcy laws is to reorganize a person or the finances of a business so that they can become solvent once more. Never is it desirable to strip a person of all their property to pay their debts. Furthermore, retirement accounts are exempt from all claims of creditors. You will be able to retain your home if you choose to and your car or truck. Your debts will be restructured or discharged, depending on which form of bankruptcy you choose, and you will lose nothing except your financial stress.
People also worry about their reputations, fearful that filing for bankruptcy will alienate friends, family and business clients. This, too, is a myth. While bankruptcy was considered in a bad light during the early part of the last century, today it is an acceptable process to solvency. It is also a private procedure that no one need know about if you don't tell them.
Others worry about their credit rating and are under the misconception that it will be destroyed and never recover. This is another myth that needs to be dispelled. The bankruptcy will be added to your credit report but it actually makes you a good risk for potential creditors. Credit card issuers know that you will not be permitted to file again for a certain number of years. You would be surprised how many credit card offers are received by people who have filed for bankruptcy. And after seven years, the bankruptcy is removed from your credit report.
Another misconception is that you need a minimum amount of debt in order to file for bankruptcy. This, too, is false. It doesn't matter how little or how much debt you have, it is your ability to pay those debts that determines if you can file for bankruptcy.
People also mistakenly believe that when they file they will be hounded by their creditors and harassed even more than previously. In fact, just the opposite is true! Bankruptcy laws state that once you have filed, any creditor who attempts to collect a debt that you have included in the filing is breaking the law and is subject to criminal penalties. Bankruptcy stops all collection efforts, including telephone and mail contact.
The most damaging myth of all is that bankruptcy is a personal failing. When a person files for bankruptcy it merely means that they have recognized that they are in financial trouble and they are taking steps to correct it. In most cases, it isn't even financial irresponsibility that causes them to file but a chain of circumstances beyond their control. It takes courage and resolve to file bankruptcy and start improving your life.
Nick Messe is the president of Lead Frog LLC. At
Legal Atlanta we offer immediate assistance with bankruptcy We are
Atlanta Georgia bankruptcy lawyers. If you are being harassed by creditors we can have the harassment stopped almost immediately. Call us at 404-559-1121
