Finding yourself in the position of needing to file bankruptcy can be scary and unnerving. Part of the stress can be due to the uncertainty of the long-term consequences of having a bankruptcy on your credit report. There is a lot of misinformation out there about bankruptcy, so it’s a good idea to do some research before making assumptions.
Some of the myths about bankruptcy include:
- “I won’t be able to buy a house for ten years.” – This may have been the case in the past, but it is definitely not true these days. Depending on which type of bankruptcy you have filed, you could qualify for a mortgage within two to five years.
- “I’ll lose my car.” – In most situations, as long as you are able to stay current on your payments and keep your car insured, you may keep your automobile. If you are behind on car payments, you may be able to negotiate with your lender to get back on track. Sometimes they will even reduce your payments or interest rates because they’d rather receive some income than have to repossess a vehicle.
- “Everyone will know I filed bankruptcy.” – Bankruptcies do show up on your credit report and are a matter of public record, but there is really no reason for anyone in your daily life to know about your credit history. Some employers run credit reports as part of their pre-employment screening, but in general, the only people who will know about your bankruptcy are those you choose to tell. It just might be a good idea to share your experience with someone you trust and there really is nothing to be ashamed of. Many people have been in your exact position.
- “Bankruptcy is a free ticket out of all my debt.” – While a Chapter 7 Bankruptcy does discharge many types of debt, filing is not a decision that should be made lightly and some debts are excluded. There are very real consequences to consider, so if you have other options, those should be explored first.
- “Filing Chapter 13 does not reduce debt.” – Chapter 13 is a type of bankruptcy that should not be ignored. Many people assume that Chapter 13 just recalculates your payments, but you end up paying off the debt in full. This is usually not the case. After you complete your three to five year repayment plan, much of your remaining debt can be discharged.
- “Filing bankruptcy means I’m lazy and irresponsible.” – This is in no way the case for the overwhelming majority of people who file bankruptcy. Most people are just like you: hard working people who honestly try to do their best, but due to life circumstances or even unwise decisions, end up over their heads in debt. Rather than focusing on the bankruptcy itself, think about the new start you will be making. This is an opportunity to revamp your budget, set goals, and move forward.
Before jumping into bankruptcy or assuming it just won’t work for you, make sure you have your facts straight. We’ve been helping people like you for years and are here to answer your questions so you can make an informed decision. Give us a call now to get started.
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We are here to help as you strive toward financial freedom. We’re experienced and have up-to-date knowledge about all the aspects of bankruptcy law. Don’t feel like you have to navigate the system alone. We’re here to take your call! Contact us today to get started. Click here if you need a Eugene bankruptcy attorney , or check here for our other Oregon and Washington locations.