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Bankruptcy Myths Exposed!
By plrprousers | March 26, 2009
Myths surrounding bankruptcy are many and perhaps it is mentioned very often in the stock market news . Some are real, some are not. People avoid filling for bankruptcy when they are true need of it just because they are scared of it. The article intends to raise the curtain over the myths related to bankruptcy.
Myth #1: If I file… I will lose all of my assets and I will have to start over
This doesn’t happen to be true. The particular type of bankruptcy determines how many of your assets can be seized. And the state has laws which protect debtors from losing certain types of assets, such as your property, your car, your clothes, etc.
Myth #2: If I file… I will never be able to file again
This statement also happens to be false. Of course, there are limitations to the frequency of the bankruptcy claim, but it is not a one-time-only procedure. Bankruptcy can only be filed once every 8 years. Regarding a reorganization bankruptcy the frequency increases, but you may not file again if your previous file has not been discharged yet. Remember it is never a wise idea to file over and over again; it will probably do more damage than good.
Myth #3: If I file… my credit rating will improve
This is full nonsense. You feel that just because your debts are a thing of the past, your credit score will automatically rise. A bankruptcy input on your credit report is one of the worst inputs a report can have in your money. This negative record may stay on your report up to 10 years, no matter the discharge of the claim.
Myth #4: If I file… I will never get a loan again in my life!
People tend to be overly dramatic at times, and above statement clearly proves it. It is just not true. You will see that a few months after filing a bankruptcy claim, credit card offers will start arriving again in the mail. As regards to loans, if you have just filed and you are thinking of buying a new car or a property, think twice. You will find it hard to receive finance, and even if someone is ready to fund your project, interest rates will be sky-high. The best thing to do is to wait a couple of years to get your life back on track, and then apply for a mortgage loan or an auto loan. Your eligibility will be the same as that of someone who has never filed for bankruptcy.
Myth #5: If I file… creditors will cease to harass me
Some truth. The law protects the debtor against collector’s harassment once the claim has been filed because all of your debts are put on hold and may not be collected. Collectors who break the rules will find that the debtor may take a cause of action against them.
We have exposed the most ordinary myths related to bankruptcy. Now that you know what is real, and what is not, you will be able to make a more confident personal and investing decision.
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