If you are like most Americans considering bankruptcy, you are probably going through a great deal of stress right now. Perhaps you feel that filing bankruptcy makes you a bad person or “dishonest” in some way. Many of our clients have told us they feel guilty about filing bankruptcy, as if it makes them un-American or so-called “deadbeats.”
To be honest, there are definitely some people who take advantage of our system and file bankruptcy dishonestly, but the majority of filers are just typical, hard-working Americans who have fallen on difficult times.
Bankruptcy Myth #1: Your credit will be ruined for seven years. You won’t be able to buy an automobile or get a credit card! You won’t be able to rent a car! You won’t be qualified to get a mortgage! You won’t be able to refinance. And so on and so on and so on…
These are all myths.
The truth about bankruptcy is that, in many situations, it will help your credit. Especially if your score is very low right now, (less then 500 for example), and you have a mountain of debt. Your credit score will go up after you file bankruptcy, often very quickly, as long as you do your part. Read more about doing your part in the next section of this web page.
Bankruptcy Myth #2: People who file bankruptcy are irresponsible and careless with their personal finances.
This is just silly.
It could mean the person has gone through a great personal tragedy– a terrible sickness, the loss of a job, or becoming a widow, just to give a few examples. It could mean the person was a senior citizen who was swindled out of their retirement, as has been known to happen.
Currently, the state of the U.S. economy is causing many people to file bankruptcy; many people who never imagined they would have to do something like that. Many honest Americans have been backed into a corner and have no other choice but to do so.
In the year 2010, over 1.5 million people filed bankruptcy in the United States. Of course, we do not want any of our clients to ever have to file bankruptcy– it makes it more difficult for us to help you in the short term– but when we feel strongly that bankruptcy is our client’s best option, we will be honest with our client.
Bankruptcy Myth #3: You can hide your assets from the court before you file bankruptcy.
If someone tells you that you can just put all of your money into a friend or relative’s bank account before you file, they are giving you very bad advice. If anyone tries to convince you that committing perjury to the bankruptcy court is a good idea, please dismiss this foolishness.
When you file bankruptcy, you need to document your financial situation very accurately to the Arizona bankruptcy court, and if anything looks fishy, you will find yourself in a great deal of trouble. In addition, your bankruptcy will be tossed-out by the court. It’s a very bad idea.