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Bankruptcy Myths Derailed

Guidance from a Bankruptcy Lawyer in Raleigh

In the field of bankruptcy, there are numerous myths about filing, life after bankruptcy and the effects on your credit, how the process works, and more. At Hopper, Hopper & Mulligan, PLLC we are committed to helping clients fully understand the process and how it will affect them. We are happy to answer your questions and address your concerns during a consultation but have also listed several common myths about bankruptcy on this page, for your convenience.

Bankruptcy Myths

Myth: I will lose all my property and assets if I file for bankruptcy.
Truth: When you file under Chapter 13, you will be able to keep your property and assets, as you are not liquidating these to repay creditors. Under Chapter 7, although this is the “liquidation” chapter, there are still particular assets and property that you will be able to keep. This will vary from state to state and will depend upon your particular situation.

Myth: All debts can be discharged.
Truth: Unfortunately, this is simply not the case. There are certain debts which cannot be discharged in bankruptcy proceedings, and these often include child support, alimony, and student loans. Certain taxes cannot be discharged as well.

Myth: Everyone will know that I filed for bankruptcy!
Truth: Unless you are a celebrity or other notable person that the media may track, it is rare that many people will find out that you have filed – unless you tell them yourself. The truth is that many, many people file for bankruptcy throughout North Carolina each and every day. It is highly unlikely that your bankruptcy will be made public.

Myth: I’ll never be able to rebuild my credit.
Truth: You can rebuild your credit after bankruptcy. In fact, you will probably begin getting credit card offers not too long after your bankruptcy proceedings are done (although they will most likely have very high interest rates). By being smart about your credit and paying off your debt immediately, you can rebuild your credit and again be in a position where you will have good credit and can buy a house, a car or other large purchases.

Myth: Only “losers” file for bankruptcy.
Truth: The most honest, hard-working people find themselves in a position where bankruptcy may be the only answer. Particularly in today’s tough economy, more and more people are facing foreclosure and the possibility of bankruptcy. A divorce, job loss or serious illness may be the cause for financial difficulty as well. Filing for bankruptcy is a responsible decision because it can give you the fresh start you need.

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