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Debunking some of bankruptcy's many myths

Bankruptcy is a loaded term and the process certainly has a stigma. Whether you are applying for Chapter 7 or Chapter 13 bankruptcy, there will be many questions running through your mind about what steps to take and how to complete this difficult legal moment in your life. We assure you that it can all work out, and that bankruptcy shouldn't be feared as much as it is.

Given the fear and anxiety that surrounds bankruptcy, in today's post we want to debunk some of the myths that people tell about bankruptcy. One of the primary myths of bankruptcy is that when you file for it, you will lose all of your critical assets such as your home and your car. To the contrary, this is highly unlikely. Exemptions can be utilized to protect your critical assets.

Many people also dread the prospect of never being able to get new lines of credit after the bankruptcy. Again, this is pure fiction. It will take some time for your credit score to recover and the bankruptcy will stay on your credit report for years -- but once your bankruptcy is complete and you start rebuilding your financial life, credit opportunities will present themselves.

Last but not least, many people fear that they will still have to pay back their creditors in full after a bankruptcy. In reality though, the bankruptcy will clear much of your debt, and possibly all of it. Every case is a little different and the circumstances will change with each case, but in general, you can expect some of your debts to be discharged through bankruptcy.

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