Everyone Says Bankruptcy Will Ruin Me! Is This True? Debunking the 5 Most Common Bankruptcy Myths

February 22, 2022 | By Steffens Law Accident Injury Lawyers
Everyone Says Bankruptcy Will Ruin Me! Is This True? Debunking the 5 Most Common Bankruptcy Myths

Bankruptcy myths are everywhere on the internet. However, the truth is, bankruptcy can be one of the best things you’ve done for your life, your family, and your future. While the term “bankruptcy” can seem like a frightening term, the rumor that bankruptcy is something to fear is, thankfully, a myth. Facing debt, creditors, lawsuits, and repossession is far scarier than filing bankruptcy and helping yourself get a fresh start in life.

Common Bankruptcy Myths and Why They Are False

Myth #1: “You’ll lose everything.”

This one is probably the most common of all the bankruptcy myths out there. Don’t worry, you won’t have to start all over again. State and federal laws have protections in place that shield most of your property, so you won’t have to start over. Bankruptcies are put in place so people can get back on their feet again and be productive, and it would be very difficult to do that if you had to go back to zero after filing. You and your family will be safe.

Myth #2: “Bankruptcy will destroy your credit.”

While it’s true that bankruptcy will impact your credit score, it won’t send you back to 0. In fact, with good credit habits, your credit will actually improve! Remember that your current debts are already impacting your credit score, so the best way to improve your credit is to use bankruptcy as an option to reset your financial habits and bring it up again.

Myth #3: “You won’t be able to purchase a home or a car in the future.”

While a bankruptcy may impact a creditor’s decision, we’ve seen many people can purchase cars or homes after their bankruptcy is filed. The best way to have this option is to improve your financial habits!

Myth #4: “Everyone will know about it.”

Nope. This became a common belief after some small newspapers published bankruptcy information, but now this is far less common, and your bankruptcy info will not make its way to the newspaper. The only people who’ll get information about your bankruptcy are your creditors, cosigners, and a few others we might need to give notice.

Myth #5: “You’re too young to file bankruptcy!”

Another one of the top bankruptcy myths. In actuality, being young can be the best time to file bankruptcy, especially if you’re drowning in debt. Waiting can make it worse, meaning your future might be poorly impacted. Without an early bankruptcy when you need it, you may have to spend all your money paying bad debt instead of paying for food, clothing, or a place to live. You might not be able to save anything for the future! Debt can take a serious toll on your physical and mental health, so it’s much better to start now rather than later.

Still Have Questions About These Common Bankruptcy Myths? Contact Us Today!

If you have any more questions regarding bankruptcy myths or filing for bankruptcy in Nebraska, our attorneys at Steffens Law Office are happy to help. Please fill out our online contact form or give us a call today at (308) 872-8327.