When it comes to filing bankruptcy in California or elsewhere in the U.S., myths and misunderstandings abound.
Perhaps you grew up thinking of bankruptcy in a certain light. Perhaps a friend of a friend filed for debt relief and you heard rumors about the process. But how much is really true?
Here are three of the most common myths regarding Chapter 7 and Chapter 13 bankruptcy:
1. “I’m the only one who is in this situation.”
This is not true. As our country’s economy has fluctuated over recent years, more and more people have found themselves saddled with staggering amounts of debt. According to a FindLaw.com survey, approximately one out of every eight Americans have either filed for bankruptcy or considered doing so.
2. “Bankruptcy will prevent me from ever getting credit again.”
This is not true. An article by DailyFinance.com explains how people can begin rebuilding credit right away. A large percentage find that they receive new credit card offers soon after filing bankruptcy. In some cases, people can also obtain mortgages, be approved for car loans and enjoy other types of credit within a short period of time.
3. “If I file, I will lose everything I have.”
This is not true. Both California law and federal law provide what are called “exemptions.” These exemptions allow you to keep a certain amount of your personal property.
Of course, deciding whether bankruptcy is right for you and your family is an important decision and one that should be made carefully. Speaking to an experienced California bankruptcy lawyer can help you make the choice that is best for you.