Bankruptcy Myths
Myths about bankruptcy
have persisted over the years. In the past a bankruptcy filing was a long and tedious
affair. Today the bankruptcy process has been both simplified and streamlined.
The first myth is that you automatically lose everything you have when you file and that
your credit rating will be completely destroyed for a full ten years. Both myths are
false. While it’s true that an entry documenting your filing may very well remain on
your credit report for a full decade, many lenders will
ignore the fact if you’re post-bankruptcy payment history has been solid for two
years or so. Many people have gone on to purchase homes and obtain mortgages several years
after filing.
The overall goal of bankruptcy is really quite simple. It must balance two interests.
First it must protect the interests of the creditors by recovering as much as possible
from your “bankruptcy estate” and distributing it fairly amongst them.
But at the same time, the law realizes that it’s in the best interest of society to
leave you with the assets you’ll need to rebuild your life. To leave you with
anything less would put you in a position where you would be forced to seek public
assistance - and no one wants that.
Recently several publications have appeared that are sold as do-it-yourself bankruptcy
guides. In my experience only an individual that’s facing a simple
“no-asset” bankruptcy can hope to go bankrupt without the services of an
experienced attorney.
If your case is any more complicated than that, you may save yourself a few bucks by not
hiring a lawyer but you may have many long years to regret your foolishness. Don’t
think a good attorney can make all that much difference? Ask O.J. Simpson!
Plan your work and work your plan. If you don’t, you’ll be like a sheep being
led to the slaughter. Like a sharp knife, bankruptcy cuts both ways. For some bankruptcy
is a terrible ordeal that forces them into long years of financial hardship. For others
bankruptcy is the gateway to a better life. Do you homework before you take the plunge.
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