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3 Untruths About Filing For Bankruptcy Exposed

If your finances are in shambles, you may have considered filing for bankruptcy. You may have a few reservations about the idea even though you are in debt. Filing for bankruptcy is a serious decision, and you should carefully consider your final decision. However, a number of people are reluctant to file for bankruptcy because they are misinformed. The following are three major misconceptions that are associated with this procedure.

Bad Credit for Life

Filing for bankruptcy does not mean that your credit will be ruined indefinitely. The important thing you will need to focus on is reestablishing your credit after the bankruptcy proceedings. Take time to consider how your finances became unmanageable. This will aid in reducing the chances of you getting into unmanageable debt again. A bankruptcy will remain on your credit report and negatively impact it for several years, and the more recent it is, the more challenges you may face getting reestablished. You may have to consider getting a secured credit card that reports to the credit bureaus to improve your credit score.

Lose All Assets

Perhaps you have the fear that your home and vehicle will be taken from you if you proceed with filing for bankruptcy. While it is true that some assets may have to be sold during a bankruptcy, your jurisdiction may allow you to keep some assets. These allowances may be referred to as exemptions in your state. For example, if you have four cars, you may be allowed to keep one of them, which means that you will still have a mode of transportation. Some states allow exemptions up to certain dollar amounts. Other things that you will likely be able to consider as safe during your bankruptcy are retirement accounts and items you use to perform your job.

Undesirable Reputation

In today's times, there are countless people who are living beyond their means. Some of these individuals have squandered millions of dollars. A number of celebrities and even presidential candidate Donald Trump have filed for bankruptcy. Also, keep in mind that your bankruptcy filing is a personal matter that you are not at liberty to discuss with anyone except those involved in the case. For example, lawyers, creditors, and a judge will likely be present at the proceeding and will know the intimate details. Other than that, you can choose to only discuss the specifics with relatives or close friends.