Bankruptcy Misconceptions: What You Should Know Before Filing
Bankruptcy Series: Part 1
If you feel that you’ve exhausted all of your debt elimination options, bankruptcy may be the next step. Of course, this word carries some pretty negative connotations. There’s an idea that those who file bankruptcy have made poor choices or are unable to handle their finances. This is simply untrue. Presented below is part 1 of our bankruptcy series, beginning with some common misconceptions about the process of filing for bankruptcy:
People Who File for Bankruptcy are Bad with Money
In most cases, a petition for bankruptcy is filed by an individual who has been with a hardship that makes it difficult to relieve themselves of debt. This could include anything from losing wages due to caring for an ailing loved one to experiencing a natural disaster and being forced to start over. There are any number of issues that could cause even the most dedicated saver to quickly deplete their funds and go into debt. In fact, the number of people who make $60,000 a year and file for bankruptcy has increased from 5.5% in 2011 to 9.2% in 2016. Filing for bankruptcy doesn’t mean that you’re bad with money. It means that you’ve experienced a difficult time in your life and you’re seeking ways to get back on track.
Bankruptcy is for Businesses, not Individuals
In the past, there was a large percentage of bankruptcies that were filed by businesses. That statistic is changing. In 1980, about 13% of the total number of bankruptcies filed were by small, medium, and large business owners. That number has dropped drastically, down to 3%. Consumers comprise the majority of filings.
Filing Bankruptcy Means That I Lose Everything
While you may be forced to sell some of your property in order to relieve your debts, there are always exemptions. The likelihood of losing all of you assets are unlikely and really depend on exactly how much debt that you are in. Filing for bankruptcy does negatively affect your credit score and you will have to make it known that you filed on most job applications and credit applications. It can take years to rebuild your credit after you’ve filed bankruptcy, which is why it’s particularly important to consider all of your options before you do.
If you are considering bankruptcy, you need a legal team by your side to support your journey. Contact Landwehr Law Offices. We want to be your legal counsel for life.