backdrop

Bankruptcy Myths

Bankruptcy Myths

When you come to the Law Offices of Marshall D. Schultz for help filing for bankruptcy, we want you to feel confident that you are making the right decision. We know that there are many misconceptions and negative ideas about bankruptcy, and we will take the time to answer any questions you may have and attempt to resolve your misgivings. Here are some of the most common myths about bankruptcy, along with the facts:

If I declare bankruptcy, everyone I know will find out.
While it is true that bankruptcy is a public proceeding, it is not likely that any of your friends or family will find out unless you tell them. If you are concerned about avoiding embarrassment, bankruptcy might be a good idea, compared with the possibility of your employer being notified that you have been targeted with wage garnishment or having to explain a repossession of your car.

Bankruptcy will ruin my credit rating.
Filing for bankruptcy will negatively affect your credit, and it will remain on your credit report for 10 years, but it does have the effect of putting an end to the problem of mounting debt. As long as you continue to carry a high debt to income ratio and miss loan payments, your credit score will continue to drop, making it that much harder for you to rebuild it in the future.

Only financially irresponsible people file for bankruptcy.
Bankruptcy is a legal protection provided by the Federal Government, and it is available for anyone whose debts have grown to unmanageable proportions. The majority of people who take this course of action do so after a job loss, a costly divorce or a medical event that led to significant healthcare bills.

If I declare bankruptcy, I will lose my house.
Debtors who file for Chapter 7 bankruptcy are exposed to the possibility of having some of their personal assets liquidated, but when you work with an experienced bankruptcy lawyer from our firm, we will fight for your right to keep your property. We can help you take full advantage of state and federal bankruptcy exemptions, and the vast majority of our clients are able to keep everything they own.

Bankruptcy releases you from all debts.
Declaring bankruptcy primarily releases your liability from non-secured debts, such as credit cards, lines of credit and medical bills. A car loan or home mortgage or any other type of debt which is secured by collateral is not normally affected. You can often use bankruptcy as an effective method of foreclosure defense, as it will protect you from creditor actions through an automatic stay.

There are many misconceptions and untruths about bankruptcy and if believed, could prevent you from making the right financial decision. Call our firm today and let us show you the truth and get you started towards financial freedom. We have two convenient offices located in Detroit and Southfield, so do not wait to visit one of our locations today!

Contact Our Detroit Bankruptcy Law Firm

Request Your Free Consult

Send My Message