Common Myths about Bankruptcy

Bankruptcy has received a bad reputation in the past, however, despite popular belief, bankruptcy can be a very powerful tool in helping people who are drowning in debt, obtain financial relief. Many Americans who have suffered from layoffs, pay cuts, unforeseen medical expensenses and a reduction of hours, have made the choice to file for bankruptcy and as a result, have been relieved of both the emotional and financial burdens of out of control debt. There are a lot of rumors out there about bankruptcy, below are some bankruptcy facts that will dispel some of the myths.

Myth: If I file a chapter 7, I will lose everything. This is not true. Every state has exemptions that protect a variety of assets including your retirement accounts, your personal home, your car (up to a certain value), furniture, clothing and much more.

Myth: I will never be able to get credit again. This is false. Many clients have reported that shortly after their bankruptcy was discharged, they started receiving credit card offers in the mail. In addition, it should be fairly easy to get an auto loan after bankruptcy. Keep in mind that the initial interest rates will be high, but as long as you don't run up your credit and make your payments on time, more attractive interest rates should be available a few years after your discharge.

Myth: After the 2005 changes to the bankruptcy law, I won't qualify. The truth is the recent changes to the bankruptcy laws have had very little effect on who can qualify.

Myth: Bankruptcy is for people who are unethical and run up their credit cards on purpose. Most people who file for bankruptcy did so after some major life changing event such as a divorce, a job loss, pay cut, cut in hours or serious illness.

Bankruptcy Attorney in Irvine

If you are thinking about filing for bankruptcy, an Irvine bankruptcy lawyer from Peter Rasla & Associates, P.L.C. can help. Filing for bankruptcy is an important decision to make. We can help give you all the information you need and answer any questions that you might have, so that you can make an informed decision before moving forward with bankruptcy.

Contact an Irvine Bankruptcy Attorney from our firm today for a free consultation.