On average, more than a million people file for bankruptcy each year. It’s a legal method of discharging debts when you lack the ability to repay them. Despite the commonplace nature of bankruptcy, there are still plenty of misconceptions about the process. Before dismissing the idea of bankruptcy as a solution for your financial woes, consider talking to a bankruptcy attorney to learn the truth behind common myths.
Myth: I’ll Lose All My Assets
The process of bankruptcy involves scrutinizing your finances, including your assets and liabilities. It’s true that bankruptcy trustees can sell certain assets and use the proceeds to pay creditors. However, in most cases, bankruptcy petitioners can expect to keep most if not all of their assets. In all likelihood, you’ll keep your home, vehicle, retirement accounts, clothing, household goods, and other assets.
Myth: Everyone Will Know I’m Going Through Bankruptcy
A bankruptcy proceeding is indeed a matter of public record. However, unless you’re a celebrity or an otherwise prominent figure, it’s unlikely that your family members, friends, co-workers, or other associates will find out about it unless you tell them. The only people and organizations that will definitely know about the bankruptcy filing are your creditors and your bankruptcy lawyer.
Myth: Both Spouses Must File for Bankruptcy
In most cases, it makes sense for both spouses to file for bankruptcy since couples often hold liabilities in common. However, if you have a significant amount of debt that is in your name only, it may make more sense for you to file for bankruptcy without your spouse. The bankruptcy attorneys at Cutler & Associates, Ltd. can help you learn more about bankruptcy and determine whether it might be right for you. We provide expert guidance and actionable solutions to help our clients build a stronger financial future. Residents in the Aurora and Schaumburg areas are invited to call our team at (847) 505-0380 to schedule a free evaluation.