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Is that True?

Myths Regarding Bankruptcy

Many people believe that they will be scrutinized, ridiculed and judged when they file for bankruptcy. The truth is, many Americans are all experiencing very similar financial hardship. In fact, they are estimating that 1.21 – 2.25 million Americans will file for bankruptcy in 2012 which is 1.38 less applicants than last year. There are many misconceptions and falsehoods regarding bankruptcy that mislead people into thinking it is some sort of dreaded remedy. People think bankruptcy is for those you lack self-control and cannot resist the temptation that a credit card provides, while that may be true for some, people file for bankruptcy for many other legitimate reasons. Take a look at some of the myths about bankruptcy that surfaced over the years.

Filing will Permanently Ruin your Credit

This is probably the number one misconception that keeps many people, who should file for bankruptcy, from filing. While bankruptcy does stay on your credit report for ten years after, you will be surprised just how quickly you can re-apply for a secure credit card or how soon you can take out a loan. Then after about six months or so, you can get rid of your secure credit card and get a regular card. It is essential however, to make timely payments for the card in order for your credit to improve. Many companies still offer credit to bankruptcy applicants during that ten year period.

Almost all bankruptcy applicants see an improvement in their credit score after just 2-4 years. If you prove to the creditors that you are now a responsible debtor you will be surprised at just how quickly you can turn your finances around. You may even be able to qualify for a mortgage after just 2-3 years after filing. If your credit score has not advanced since your bankruptcy, something must have gone awry and you should contact your bankruptcy attorney as soon as possible.

Filing makes you a Financial Failure

The case may be for some that they abused the freedom and leniency that credit cards provide and are unable to avoid the enticement that it instills. More commonly however, it is specific circumstances that bring a person to a place of financial crisis. Whether it is a financial depression, a divorce, a loss of income, or an illness, many things can act as an impediment and make it difficult for you to keep up with your bills and still provide for your family. Once someone loses their job, they may not be able to find another for a good period of time, leaving them unemployed long-term.

A recent study in Spring of 2012 showed that more than 5.2 million Americans have been unemployed for at least six months now. In cases such as this, it is easy for debt to quickly accumulate, making it nearly impossible for them to ever get back on their feet. Filing for bankruptcy however, could help discharge most of their unsecured debt so they can start paying and managing their bills again.

Filing Could Cost you Your job

Bankruptcy usually becomes open knowledge and gets public disclosure if you are a prominent member of society or a famous social figure. Other than that, no one will be notified that you have filed for bankruptcy unless you tell them yourself. Your employer is not even informed unless wage garnishment goes into effect or you give written permission that they can be alerted. Under the bankruptcy code section 525 protects debtors who file for bankruptcy from losing their jobs. The law prohibits any such discrimination on behalf of their employers. In fact, the government is not even permitted to consider bankruptcy a disqualification for hiring. Private employers however, may take that into consideration when choosing to hire someone. If the reasons for termination were not solely in regards to bankruptcy then the employer may have grounds to fire someone.

Filing is Impossible with the new law

In 2005, President Bush felt that people were taking advantage of the bankruptcy system so he implemented new laws to ensure that people were in fact eligible to file. While the filing process has become a bit more difficult, it is far from impossible. In order to jump through those small hurdles, it would definitely be in your best interest to obtain the help of a qualified bankruptcy attorney. So don't lose heart, the number of bankruptcy filings has not been vastly affected since 2005. If you are an honest debtor who could benefit from filing bankruptcy then nothing should stop you. Talk to the legal team at Price Law Group today to find out if your eligible to file and how bankruptcy could benefit you.

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