Three Common Myths About Bankruptcy

Posted By The Pritchard Law Firm || 01/28/2016

Bankruptcy can be a frightening concept at first glance. Due to its social stigma of being associated with failure and shame, many people have shied away from ever considering bankruptcy as a viable solution for their debt. This is simply not true! Bankruptcy is an honorable and completely legal option for financially struggling Americans to start fresh, providing much needed relief from harassing collection calls. To help clear up some confusion, our firm has put together a list of common bankruptcy myths.

1. “I Can Never Get a Credit Card Again”

Many people believe that they will never again be approved for a credit card once they have filed for bankruptcy. The reality is quite the opposite: many people receive credit card offers almost immediately after completing the bankruptcy process. While access to certain cards will be limited, you will certainly be able to get a low-limit credit card. Using a credit card after bankruptcy is vital to helping you rebuild your credit score and improve your options for future auto and home loans. With that being said, excessive credit card spending is the reason why many people find themselves in financial straits in the first place, making it imperative that you spend with caution.

2. “I Will Lose Everything”

Yet again, this one is false. During Chapter 7 bankruptcy only non-exempt property will be subject to being claimed by creditors. While the exact amount of property you will be able to keep will vary depending on your marital status, a surprising amount of your assets will be off-limits from creditors.

Texas offers generous exemptions during bankruptcy, allowing you to keep:

  • Your home
  • Your retirement assets
  • Your vehicle
  • Your equity in your home
  • Up to two firearms
  • Your clothing
  • Up to $100,000 of personal property

If you are filing for Chapter 13 bankruptcy, you will be able to keep nearly all of your assets. As opposed to the liquidation process of Chapter 7, Chapter 13 bankruptcy involves creating a three-to-five-year repayment plan. An experienced attorney can examine your situation and determine which option best fits your individual needs.

3. “Everyone Will Know I Have Filed”

Despite bankruptcy’s completely legal nature, many people feel ashamed of their filing and are fearful of having anyone find out about their struggles. The only people who will know you have filed for bankruptcy are your creditors, your lawyer, and anyone who you choose to tell. While bankruptcy is a matter of public record, the sheer amount of filings that occur make it so only those who are specifically interested in uncovering your past are likely to discover your filing. Unless you live a life in the public eye, your chances of having anyone find out about your bankruptcy filing are slim.

Contact The Pritchard Law Firm Today

If you are struggling with debt, a highly knowledgeable Fort Worth bankruptcy attorney from The Pritchard Law Firm can walk you through the process of filing for bankruptcy and guide you towards a financially sound future. With more than 45 years’ of combined experience, we can provide the skilled and compassionate representation you need to help you get through this difficult time.

To find out more about what our award-winning lawyers can do for you, call (817) 285-8017 to request a free consultation today!

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