The Most Common Bankruptcy Myths

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Bankruptcy is not what you think. Society often categorizes this legal process as something bad, complex, or impossible to recover from. However, all of our clients feel relieved after the process is finished and are quickly off to a financial fresh start.


Although bankruptcy isn't something that most individuals want to discuss, it's always better than leaving debts unpaid while struggling to keep up with your monthly expenses. 

Here are some of the most common myths when it comes to bankruptcy:

1. Filing for Bankruptcy means that I Failed - NOT True! Our founding fathers recognized the necessity of bankruptcy, which is why it's mentioned in the US constitution.  Additionally, many studies have found that it's often external issues that are out of a consumer's control that puts them in these financial situations. 

2. I'll lose everything if I File- NOT True! With state exemptions, many clients are able to keep most of their assets. Our firm in particular works diligently to ensure you or your family is able to keep your most valuable possessions, if not all of them. Setting up a free consultation with our office, (813) 659-3612, can help give you a better idea of what we can help you keep. 

3. All of my Debts will Go Away - NOT True! Although most debts will be discharged, there are a few lines of debt that will normally remain. These include:

  •    Student loans are very difficult to discharge.
  •    Recent income taxes are not dischargeable.
  •    Domestic support obligations like past-due child support and alimony will not be discharged.

4. I'll Never have Good Credit again - NOT True! Although most lenders will consider you to be "high risk" immediately after filing, many of our clients are within a "good" or even "excellent" credit range roughly 2 years after filing! 

5. I Make Too Much Money to File for Bankruptcy - NOT True! Our practice focuses on two types of bankruptcy: Chapter 7 and Chapter 13.  Median income, established by information from the Census Bureau and posted by the Department of Justice sets the income amounts based on the average family of your size in your state. If you are at or below this amount, you can file for Chapter 7, which is the traditional, or straightforward way of filing for bankruptcy. However, if you make more than what's considered average, you have the option to file for Chapter 13, which will help you pay back your debts in a reasonable manner or you may in some circumstances still be able to file Chapter 7 if you rebut the presumption set by the median income numbers.  An individual consultation reviewing your income and circumstances 


Remember: Bankruptcy is a financial planning tool that is used to help consumers. Our firm has over 20 years of experience helping bankruptcy clients, and offers free consultations through zoom or in-person to help people get a clear picture of what their options are. 

If you have questions or concerns, please call our office at (813) 659-3612. 

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