7 Common Myths about Bankruptcy

7 Common Myths about Bankruptcy: Myths and misconceptions often prevent you from making a sound decision. The attorneys at Pratt & Maegli Law Firm will take the time to help you fully understand your legal options. We have listed the 7 most common myths about bankruptcy:

Myth #1: bankruptcy will ruin my credit.

Fact: False. After your bankruptcy, all of your current debts will be discharged. This means that you will have a chance for a clean start. If you pay all of your bills on time and do not fall behind on any payments, you will see your credit score improve, despite the fact that you filed for bankruptcy. Also, It is likely that you will have credit opportunities immediately after filing for bankruptcy. Filing for bankruptcy gives people with overwhelming debt the opportunity to rebuild their credit. After you bankruptcy you are like a clean slate to the credit company. It usually takes less than a year or so after bankruptcy to acquire new credit.

Myth #2: I will lose my house, car and other possessions.

Fact: False. Bankruptcy is designed to help individuals who struggle with too much debt. Bankruptcy was not designed to punish people who do not pay their debts by selling their homes or cars. Most people who file for bankruptcy lose no property at all.

Myth #3: I will never be able to purchase a home or car after bankruptcy.

Fact: False. Almost all of our clients have been able to purchase a home or car after filing for bankruptcy. It usually takes about two years after bankruptcy before you can purchase a house and even less time to purchase a car.

Myth #4: My spouse will be held liable for my debt.

Fact: This may not be the case. It will depend on your specific financial situation. Consult with an attorneys from Pratt & Maegli Law Firm and we will give you specific advice based upon your situation.

Myth #5: I’m a bad person if I file for bankruptcy.

Fact: Absolutely false. Thousands of very responsible, good and decent people file for bankruptcy every year. It is much better to take responsibility for your financial future through bankruptcy than simply ignoring your creditors and continuing to avoid making payments towards your debt.

Myth #6: A debt counselor can help me avoid bankruptcy by eliminating my debts.

Fact: False. Debt counselors cannot help you eliminate your debt and they cannot legally prevent your creditors from abusing and harassing you. The only way to eliminate your debt and absolutely stop creditor abuse is to file for bankruptcy. Typically debt counseling companies are only concerned with taking your money.

Myth #7: I can go to jail if I don’t pay my debts.

Fact: False. There is no debtor’s prison. You will not be sent to jail for failing to make payments toward your debt, even if you get sued or a judgment is obtained against you.

Contact Pratt & Maegli Law Firm today for your free evaluation. If you are considering a bankruptcy in the Northern Illinois or Rockford area we can help because we take it personally.

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