Bankruptcy Xml

There are many misconceptions that people hold about bankruptcy, mostly due to the lack of understanding of the process. While there will always be legitimate concerns, many of these myths prevent people from seeking the help that bankruptcy can offer. These top three myths are the most common when discussing bankruptcy and the facts behind the myth may be quite surprising to some.

I Will Lose Everything

Perhaps the biggest fear among potential bankruptcy filers is the idea that assets will be lost or seized by creditors. While some creditors may maintain the legal right to liquidate certain assets, there is by far no guarantee this will happen in bankruptcy. When you file for bankruptcy an automatic stay order is issued, which halts any collection or repossession actions. In general, there is a greater potential for some secured debt assets to be liquidated in Chapter 7, whereas a Chapter 13 case poses very low risk. The court has the final say as to which assets may be granted for seizure and liquidation and which are eligible to be kept. Further, bankruptcy exemption laws offer a range of protection for many assets in bankruptcy. In some cases, you may be eligible to exempt your house, car, personal property and nearly all retirement or investment fund accounts.

Everyone Will Find Out

Many people worry about their reputation when experiencing financial hardships. Although debts are a personal responsibility, having difficulty managing debts does not make you a bad person. In fact, there are numerous reasons why people end up in bankruptcy that are through no fault of their own. When it comes to protecting one's privacy in bankruptcy there are several issues to consider. First, a bankruptcy filing does become a matter of public record. However, this refers to the availability of the information for court and legal purposes. It is highly unlikely that anyone would find out about a filing unless they went digging for the information or you told them. Only high profile, corporate or fraudulent cases become a newsworthy matter. Also, there are bankruptcy laws that prohibit employer discrimination on the basis of a bankruptcy. While the chances of an employer finding out are slim, they wouldn't be able to make any employment decisions based on this fact alone.

My Credit Will Be Ruined

This myth is the most misunderstood concept about bankruptcy. Most people hold the assumption that filing for bankruptcy damages your credit. In fact, bankruptcy itself does not damage your credit and can even boost your credit immediately following a debt discharge. The confusion lies in the fact that missing payments and carrying delinquent accounts, which are essential for bankruptcy qualification, result in credit damage. You come into bankruptcy with the damage done and filing actually provides a platform for rebuilding credit with a fresh start. The other source of confusion is found in securing future credit. While finding a good deal on credit or loans after bankruptcy can be more challenging, it is far from impossible. There are numerous creditors whose target clients are post-bankruptcy consumers. The short of it is this: your credit was already damaged before bankruptcy; you gained a fresh start and have to work a little harder to prove your credit worthiness.

Ryan understands that financial hardships can affect honest, hard-working people. His area of expertise is bankruptcy law and aims to provide all his clients with the fresh start they are looking for. His business philosophy is guided by one thing, helping people get back on track. As a Austin bankruptcy attorney his practice has given him the opportunity to directly impact the lives of many people.

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