Three Bankruptcy Myths That Keep You Indebted

Bankruptcy is a controversial issue. It seems that no matter how ill-informed an individual is, they always seem to have something negative and usually incorrect to say about bankruptcy. Below are three myths about bankruptcy that unfortunately could keep you indebted if you make the mistake of believing them:

Myth #1 - Bankruptcy will completely destroy your credit for 10 years and you won't be able to buy a home, buy a car, get a credit card or even rent an apartment in your name.

Fact: While a bankruptcy filing will remain on your credit report for 10 years, it will not stop you from getting credit, renting an apartment or even buying a car or home.

Many people just like you, file bankruptcy and within a few months after their bankruptcy discharge, they are able to get secured credit cards that eventually are converted into unsecured credit cards after about a year of timely payments. Worried about your ability to buy a home?

No need to worry, many lenders are willing to issue mortgages to former bankruptcy debtors only a couple years after their case has been discharged. Opportunities for credit access don't shut down for debtors after successfully filing bankruptcy, the truth is that they open up and offer the debtor a chance to rebuild their credit worthiness.

Myth #2 - If you file bankruptcy, you will lose all of your cash and property. People who spread this myth want debtors to believe that bankruptcy is a wealth destroying act, when in fact it protects wealth.

Fact: Bankruptcy protects the assets of debtors who simply cannot repay the money they owe. Without the help of bankruptcy, many debtors would be wiped out with a barrage of creditor lawsuits, judgments, wage garnishments and asset seizures waged by desperate creditors determined to get paid regardless of the cost to the debtor.

Bankruptcy prohibits creditors from feasting on the few assets struggling debtors have remaining. Using bankruptcy exemptions, debtors in bankruptcy can keep essential assets such as their home and discharge some or all of their unsecured debts.

Myth #3 - People who file bankruptcy are irresponsible losers trying to cheat the system. Many people have serious hang-ups about anyone being able to discharge any debts they may owe. But this belief is in direct contradiction to the moral principals we hold as a culture.

Fact: Bankruptcy was created because our forefathers believed that everyone deserved a second chance even if they made mistakes in their financial lives. Bankruptcy is designed to help those who have made financial mistakes or fallen on hard times. Debtors who file bankruptcy are showing that they in fact acknowledge that they have financial troubles and are willing to do what it takes to clean up their financial lives and get a fresh start.

Debtors looking to fix their financial lives must remember that there are many myths floating around about bankruptcy and if they want to make an informed decision, they should consider only the facts.

Reed Allmand is author of "The Truth About Bankruptcy" and "The Secrets About Foreclosures." He is certified in consumer bankruptcy by the Texas Board of Legal Specialization and has over 9 years of bankruptcy law experience.

Reed Allmand and Christopher Lee are partners in the Law Firm of Allmand & Lee and together they has handled more than 3,000 bankruptcy filings. Allmand & Lee takes their commitment to the North Texas community to heart and offers this simple pledge:

We Help Good People Through Tough Times.

Visit http://www.allmandandlee.com or Call 1-877-304-1571 for more information.