6 Bankruptcy Myths Debunked

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Today, we are going to discuss some common bankruptcy myths. From which debts can be discharged by a bankruptcy to how filing for bankruptcy will affect your credit score, it’s time to debunk some myths and get down to the facts. Continue reading to learn more and when you are ready to speak to an experienced Edina bankruptcy attorney, schedule a consultation at MLG Legal. 

Myth #1 You Will Never Get Credit Again If You File for Bankruptcy

While filing for bankruptcy will affect your credit, it’s simply not true that you will never be approved for a line of credit again. In fact, you might be surprised to receive credit card offers right after you file for bankruptcy, although the interest rates on these cards are not what we would call desirable. After filing for bankruptcy, although it may take some time, you will be able to get credit cards, vehicle loans, and even a home loan, just be sure to look over the interest rates and terms before signing up for anything.

Myth #2 Bankruptcy Discharges All Debt

While filing for bankruptcy does discharge some debts, it does not discharge all of your debts, no matter what chapter you file. Unsecured debts such as credit card debt, personal loans, medical bills, and utilities bills are often discharged during a bankruptcy, but many types of taxes, child support and alimony are not. 

If you are interested in learning how much and which debts would be discharged if you file for bankruptcy, an experienced bankruptcy attorney can help. Schedule a consultation at MLG Legal and we can help you determine if bankruptcy is the right choice for you. 

Myth #3 You’ll Lose All Your Assets by Filing for Bankruptcy

Typically speaking, if you can afford to continue to make payments on your assets such as your home and car, you can usually keep them. However, you should prepare yourself to possibly       lose some assets during a bankruptcy, especially those that are non-essential. 

Myth #4 Your Credit Score Will Never Recover If You File for Bankruptcy

It is true that your credit score will take a hit when you file for bankruptcy. However, that doesn’t mean that it will never recover. The more time that passes and the more often you make your regular payments on any debt due, the better your credit score will become. There are many factors that go into a credit score, but one of the best ways to increase your score is to minimize your debt and ensure your making on-time payments on any loans you may have.

Myth #5 Those Who File for Bankruptcy Are Financially Irresponsible

Many have an impression that someone who files for bankruptcy must be financially irresponsible in order to have gotten into that position, but this couldn’t be further from the truth. While there may be cases where an individual made some bad financial decisions, there are many other ways that responsible adults find themselves considering bankruptcy. For instance, the loss of a job can have a detrimental effect making debts and bills impossible to pay. In another scenario, someone who suffers from an unexpected injury or illness may have medical bills that they simply cannot afford. People find themselves considering bankruptcy due to all different types of situations, and that does not mean that they are financially irresponsible. 

Myth #6 Filing for Bankruptcy Is a Long and Complicated Process

Filing for bankruptcy can be complicated if you try to do it on your own, but when you have an experienced bankruptcy attorney on your side, it’s a fairly simple process. An attorney understands exactly what needs to be done, which paperwork to file, and the court process for a bankruptcy. They are a valuable asset to have on your side if you want to make the process as easy and as quick as possible. 

Schedule a Consultation With Our Edina Bankruptcy Lawyers

If you are considering filing for bankruptcy, it’s important for you to know that you are not alone. At MLG Legal, we have extensive experience handling bankruptcy cases of all kinds, and we will use that experience and expertise to work for the best outcome possible for you. If you are interested in learning more about bankruptcy or other debt relief solutions, contact the team at MLG Legal today and schedule a consultation with one of our Edina bankruptcy lawyers.