Bankruptcy Myths

Common Bankruptcy Myths

Bankruptcy Misconceptions Clarified by 1^st California Law, Inc.

You may be wondering if filing for bankruptcy is the best course of action for you, as it is likely that you have heard some of the common bankruptcy myths and misconceptions at some point during your investigation of the process. For this reason, our firm hopes to dispel some of the rumors and provide you with the facts about this form of debt relief. Although this process may not be right for your financial situation, it is important to understand the truth about both the advantages and disadvantages before making a final decision. For any other questions that you may have that are specific to your case, do not hesitate to consult an Orange County bankruptcy lawyer from our firm.

Understanding the Myths

You have most likely heard some rumors and stigmas attached to filing for bankruptcy. Although some of these misconceptions may be partially true, you shouldn't be dissuaded from bankruptcy until you get all the facts.

Some of the most common bankruptcy myths include:

#1. Filing for bankruptcy will eliminate all of my debt

While this is one of the many advantages of filing for bankruptcy, it only applies when filing for Chapter 7 bankruptcy. Even so, there are certain kinds of debt that cannot be discharged, including taxes, alimony, student loans and child support. However, when filing for Chapter 13 bankruptcy, you pay off past obligations over a 3-5 year period, and usually pay only a percentage of the amount owed by the time the process is complete.

#2. Bankruptcy will ruin my credit score for ten years

People often believe that their credit will be ruined for ten years after the process has been completed, as the bankruptcy petition will appear on their record for this length of time. Actually, an individual's credit can begin to improve after filing, as they will have the chance to re-establish their credit—which will no longer be affected by wage garnishments, late payments or lawsuits. There are effective ways to achieve credit restoration, but it is up to each individual to be proactive in their efforts.

#3. I can spend as much money as I want before filing for bankruptcy

Some believe that if they are already planning to file for bankruptcy that they should just use their credit cards to the maximum limit or transfer money to a relative. This is simply untrue, as doing so could actually prevent you from being able to successfully file for bankruptcy. Spending money that you do not have is never a good idea, especially when you have already accumulated a serious amount of debt.

#4. I will lose all of my assets after filing for bankruptcy

Many people fear that they will lose everything that they own, which is not true. Many personal possessions, including items such as vehicles, work-related tools, and homes up to a certain value are exempt. This means that they cannot be repossessed in the bankruptcy process. However, making arrangements carefully in these matters is of the utmost importance. When the process is managed professionally, most people who file for bankruptcy lose none of their assets.

Consult a Santa Ana bankruptcy attorney today!

If you have additional questions about the bankruptcy process, we urge you to consult an experienced attorney from our firm. Making an ill-informed decision regarding your future could prove to be detrimental to you in the end, so it is important to take the time now to gain a better understanding of what is fact and what is fiction when it comes to filing for bankruptcy.

Whether you have already made up your mind about the course of action that you would like to pursue or you would like to explore other alternatives, do not hesitate to schedule a free consultation with a bankruptcy lawyer from 1^st California Law. Time is of the essence when your financial viability is on the line, so take the necessary steps to get you back on track today.

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"Amazing law firm to work with, very knowledgeable, & very kind!"
Amazing law firm to work with, very knowledgeable, & very kind. They made filing for bankruptcy easy. Kevin is a amazing lawyer, would definitely recommend to friends and family.

- Evelyn V.
"Kevin made us feel at ease during a very stressful time in our lives."
Kevin is the best! He made us feel at ease during a very stressful time in our lives. His upbeat personality and thorough explanations made this whole process effortless. His communication was on point and the cost for his services was absolutely reasonable. If I ever need legal service again in the future, he is my go to guy. Love him!

- Elizabeth C.
"Being the light at the end of this scary tunnel!"
Nobody ever hope to find themselves filing for bankruptcy but when I did, my first call with Kevin put me in such ease that I knew I found the right person to help me.

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"Made the entire process of filing my case approachable & much less stressful than anticipated!"
Kevin was absolutely fantastic to work with. He made the entire process of filing my case approachable and much less stressful than I anticipated. He was responsive, professional, and direct throughout the entire process, and personally accompanied me at my hearing. I would highly recommend his services.

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"One of the best bankruptcy attorneys to work with!"
Kevin Kunde was one of the best bankruptcy attorneys to work with. He was kind, informative, courteous and very knowledgeable. I would recommend 1st California Law and Kevin Kunde services to anyone seeking debt relief assistance. Bankruptcy can be a very scary situation and I through out the entire process I felt well guided and taken care of by 1st California Law. Thank you for everything.

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It was the best experience ever with Kevin, I consulted several attorneys regarding my bankruptcy before I went to Kevin, and Kevin was very helpful and also the fees is very good. It was so easy to prepare my filling with him and he kept me updated with everything and tell me everything I need to know even if I didn't ask for it. Kevin show up with me in court and he was very helpful in getting over this stressful situation easily and smoothly, highly recommended him and his office if you look for any financial relief advice or help. Thanks Kevin.

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