5 Myths About Bankruptcy

Sometimes well-meaning people are capable of doing the most damage. At Sigmon & Henderson, PLLC, we frequently witness this at our Gastonia, North Carolina, bankruptcy practice. We see people come to us who have struggled with debt far longer than necessary because they were given false information about bankruptcy by friends, relatives and colleagues.

Sadly, myths about bankruptcy persist in our society and prevent many people from getting the fresh start they deserve. We hope that dispersing these five myths about bankruptcy will lead more people to take advantage of their rights under the United States Bankruptcy Code.

"You can't file bankruptcy anymore."

Time has healed some of the damage from this myth. It stemmed from changes to bankruptcy laws in 2005 that led many people to believe they cannot file bankruptcy. While some obstacles such as means testing were thrown in the path of struggling consumers, it is still possible to eliminate the burden of debt by filing for Chapter 7 or Chapter 13 bankruptcy with the help of an attorney.

"Bankruptcy will ruin your credit forever."

A bankruptcy will show up on a person's credit report for seven years, resulting in an initial hit to their credit ratings. However, the act of filing bankruptcy provides an opportunity to eliminate unmanageable debt and rebuild credit. This is an example of a short-term cost being worth the long-term benefit.

"You will lose your house or car."

North Carolina offers numerous property exemptions in bankruptcy. In almost all bankruptcy cases, we can protect our clients' homes and cars.

"Debt settlement is quicker and easier."

Not only is debt settlement not quicker and easier than bankruptcy, it almost never works. Unscrupulous debt settlement companies prey on people who are desperate to fix their finances, taking their money and failing to follow through on reducing debt.

"Bankruptcy is an irresponsible way out."

It is actually the prudent thing to do for many people who are struggling with debt. The right to declare bankruptcy in the U.S. is based on the historical practice of forgiving debts. In fact, the principle is derived from the Old Testament, where lenders were forced to cancel debts every seven years.

Are you ready to take the first step toward the fresh start you deserve? Call 704-269-6374 or email us to schedule a free initial consultation with an experienced bankruptcy lawyer.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.