Bankruptcy Myths You Shouldn’t Take to Heart
Bankruptcy isn’t a “bad” thing. Millions of Americans have used the Bankruptcy System to provide for themselves and their families a fresh start. However, when people hear the word “bankruptcy” many fears come to mind. You won’t have to live in a van down by the river, walk to work, or have all your possessions taken from you. As silly as these examples are, the financial problems they represent are real concerns for many people. This isn’t to say that losing a car or house is a possibility, but it’s not because of bankruptcy. If anything, it can help the situation. Our Omaha Bankruptcy Experts and Lincoln Bankruptcy Experts at Skrupa Law Office, LLC want to put these myths to rest today.
Most people don’t want to file for bankruptcy for fear of embarrassment or ridicule, but this is an unhealthy mindset. By holding off on important financial decisions because you are worried what others will think, you will only make the problem worse. The ultimate decision of whether to file for bankruptcy or not should be a financial decision, not an emotional decision. Your decision should be based solely on whether it will help you achieve your financial goals. In order to gain clarification from all the myths and confusion, and to know if bankruptcy is the right move for your situation, it’s important to get professional advice early on. Read Skrupa Law Office’s blog to learn more.
“It will be hard to recover financially if you file for bankruptcy.”
This is false. Your future ability to gain credit will mostly be a function of employment, job longevity and income. Most major lenders already have guidelines in place for obtaining credit after your bankruptcy discharge. Please note: There is no “7 year rule” that bars you from obtaining credit after bankruptcy. The “No Credit for 7 Years” myth has persisted for a long time. It simply isn’t true. For example, most major mortgage lenders will consider you for a house loan two years after a bankruptcy. One can normally qualify for a vehicle loan soon after their bankruptcy discharge. Most people can obtain a credit card within a year after filing their bankruptcy.
If you already have a mortgage loan when filing for bankruptcy, you sign a reaffirmation agreement, and keep making the payments. This automatically rebuilds your credit both during your bankruptcy and after your discharge.
“If you have a college degree, you’re too smart and successful to file for bankruptcy.”
Many people who have 4 year degrees and even graduate degrees find it necessary to file for bankruptcy. The average student loan indebtedness is over $27,000 upon graduation. It doesn’t take long for the bills to pile up after graduation if you don’t land your dream job right away. If you incur some credit card debt and unpaid medical debt, it can quickly become overwhelming to juggle all your obligations.
The situation above may sound familiar because it happens to so many people, but that proves just how likely filing for bankruptcy can be. Skrupa Law’s team of Omaha and Lincoln Bankruptcy attorneys wants you to understand these situations are completely understandable – often they’re not caused by irresponsible money management, but by circumstances you can’t control.
“Only people who don’t know how to manage money will have to file for bankruptcy.”
Did you know many successful people have filed for bankruptcy at one time or another? People like Walt Disney, Willie Nelson, and Larry King have been forced to file. If bankruptcy ended up being necessary and helpful for these super successful people, it doesn’t seem so bad now, does it? The decision to file for bankruptcy didn’t stifle their careers – if anything it helped them become who they are today. This particular myth may be true for some, but it’s not for everyone. Don’t allow yourself to believe this.
“I don’t want to include certain creditors in my filing because it’s important to me to pay them back someday and if the debt is discharged, I can’t ever repay them.”
Not true. You can choose to repay any creditor you wish after your discharge. You are under no obligation to do so, but many people continue to pay their health care providers (for example, family doctor), or other creditors they deem important. Of course some types are not dischargable, such as student loans and child support, however most people are able to maintain these obligations.
Contact Skrupa Law Office at (402) 571-2900 (Omaha) or (402) 464-3311 (Lincoln) Today!
Our attorneys at Skrupa Law Office, LLC are here to ensure to you that you aren’t any less of a person just because you may need to file for bankruptcy. Our long-standing motto, Compassionate Guidance through your Troubled Times, isn’t just a saying. Our staff truly cares and is here to guide you every step of the way. If you have any questions involving the bankruptcy process, contact us through the form on our website or call our Omaha Office at (402) 571-2900 or in Lincoln at (402) 464-3311. We’re ready to get started when you are!