Because Bankruptcy is both complicated and confusing, it isn’t surprising that plenty of bankruptcy myths have emerged. Everyone who has gone through Bankruptcy has had a different experience. Both time and location make the Bankruptcy experience different. Your uncle, who filed for Bankruptcy in Minnesota in 1984, had different laws that applied to his case than you will have when filing for Bankruptcy today in Las Vegas.

Political and social biases can also influence people’s perceptions of Bankruptcy. Many people believe that Bankruptcy means “giving up,”  primarily if they were raised to believe that “excuses are for [insert insult here].” Others believe that “they will never get credit again,” and the consequences of filing are too significant. Others think “they make too much even to file” because they see Bankruptcy as a program for people living in poverty, not for ordinary, everyday, working Americans.

However, Chapter 7 and Chapter 13 Bankruptcy programs are both strategic ways to solve overwhelming debt problems. Many people take advantage of these programs to obtain a fresh start.`

Bankruptcy offers a path to a fresh start. If Bankruptcy is the right choice, Attorney Dorothy Bunce at A Fresh Start Law can explain why. If Bankruptcy isn’t the right choice for you, Attorney Dorothy Bunce at A Fresh Start Law can explain why not and offer you other options. Either way, she will answer your questions.

You can request a same-day callback from our team at (702) 551-3256 or schedule a comprehensive consultation with our attorney, Dorothy Bunce, at A Fresh Start Law. The initial consultation is always free.

Bankruptcy Myths

With over 35 years of Bankruptcy experience and a frequent volunteer on the online forum, Avvo, Attorney Dorothy Bunce has answered more than 30,000 questions about Bankruptcy and debt.

A generic answer to any legal question can be misleading because your circumstances are unique. Whether good or bad, the law doesn’t provide a “one-size-fits-all” solution to debt problems. Before proceeding with Bankruptcy, why not consult an experienced Las Vegas bankruptcy attorney first? However, be prepared to share your financial secrets. You may be surprised at your options.

Common bankruptcy myths are:

1. Bankruptcy eliminates every debt.
2. Bankruptcy ruins your credit.
3. If you file for Bankruptcy, you will lose your house and car.
4. Bankruptcy increases creditor harassment.
5. You can only file for Bankruptcy once.
6. Everyone can file for Bankruptcy.

 However, the truth is:

1. Bankruptcy doesn’t eliminate “special” debts, such as child support, most taxes, debts linked to crimes or a criminal sentence, and, for many people, their student loans. But there may be a loophole that provides an exception for you, so hiring an experienced attorney to represent you can work to your advantage.
2. Your credit has been damaged because you didn’t pay your debts on time. Some people see an increase in their credit score immediately after filing for Bankruptcy. You can significantly rebuild your credit after Bankruptcy within a year, but doing this requires effort.
3. If you don’t keep making your current mortgage or car loan payments, you will lose your house and car, whether you file for Bankruptcy or not. Many times, exemption laws protect your house and your car from creditors that might otherwise be able to seize or place a lien on them.
4. Bankruptcy ends harassment by your creditors. Under Federal Law, creditors are prohibited from contacting you to demand that you pay them. It is rare for you to have any contact with your creditors after you hire an attorney. If this happens, it is typically a mistake, as the Bankruptcy Court can penalize creditors who contact you after filing for Bankruptcy. 
5. You can only receive a Chapter 7 Bankruptcy Discharge, eliminating your debts once every 8 years. However, even then, you could file a Chapter 13 Bankruptcy to protect yourself from creditors, as long as you qualify. Still, there are time restrictions on how often you can receive a Discharge to eliminate your debts in either Chapter.
6. To be eligible to eliminate debts in Bankruptcy, you must meet specific financial criteria.
7. Bankruptcy will not solve every financial problem. Bankruptcy is not typically the most suitable solution for most financial problems. Bankruptcy is an option, not a miracle solution that fits everyone’s needs.

Have you heard various stories about Bankruptcy that either sound “too good to be true” or “appear to be a nightmare?” Please email us to share your findings, as we welcome the opportunity to update this page.