Thanks to the internet, information spreads faster than ever, although the drawback is that misinformation spreads at an alarming rate too. Believing misconceptions about financial issues, legal disputes, or health concerns in particular can have devastating consequences. Here, a bankruptcy attorney debunks some of the most common myths regarding bankruptcy, so you can separate fact from fiction and ultimately regain your financial footing.

Do You Believe These Common Bankruptcy Myths?

1. Filing Will Destroy Your Credit

A reputable bankruptcy attorney will be honest when discussing the pros and cons of filing. For example, if you discharge debt through bankruptcy, it will be noted on your credit report for seven to ten years. It will also affect your credit score, which can make it hard to secure financing immediately after filing. However, it will not prevent you from opening new accounts or obtaining loans ever again. By making smart financial decisions, your credit score will improve little by little until you eventually qualify as a reliable borrower once more. 

2. Filing Will Force You to Liquidate Everything

Whether petitioners have to liquidate any assets depends on the kind of bankruptcy they declare and their particular financial situation. If you file for chapter 7 bankruptcy, you may have to forfeit some property to pay back lenders. However, you will be able to retain all exempt assets, which include appliances, furniture, and clothing, as well as tax-exempt retirement accounts, certain pension plans, workers’ compensation benefits, and business partnership property. 

3. Filing Will Discharge All Your Debt

If much of your debt is comprised of back child support, criminal fines or penalties, income tax debt, or student loans, declaring bankruptcy will not provide a financial reprieve. These kinds of debts are not typically dischargeable. If you also have a lot of consumer debt or owe a substantial amount in medical bills, though, discharging these through bankruptcy can help since you will be able to put more funds toward other debts.

If you are struggling to make ends meet, turn to Greg Dunn, Bankruptcy and Debt Relief Attorney in Honolulu, HI. This legal firm has helped locals with over 12,000 bankruptcy cases since 1996. Whether you are considering filing for chapter 7 or chapter 13, you can rely on this seasoned bankruptcy attorney for strategic guidance through every stage of the proceedings. Visit his website to learn more about the quality counsel he provides. You can schedule a free initial consultation by calling (808) 524-4529.