4 Myths About Bankruptcy

When considering bankruptcy, it’s important to be sure that you have the facts straight! There are a lot of myths and misconceptions out there regarding bankruptcy, from what it implies about the person filing, to how the process works. At Hedtke Law Group, we don’t want you to let the myths keep you from solving your debt problem! Read on to learn the truth behind the biggest bankruptcy myths. 


1. “Filing for bankruptcy means you’re a failure.”


Bankruptcy is by no means a sign of failure. Rather, it is a solution to a financial problem that people find themselves facing for a huge variety of reasons. The following are common reasons people file for bankruptcy, and certainly not failures.

  • They got divorced and had to pay alimony, or their spouse was awarded assets in the settlement that they were counting on to repay debts. Or perhaps they were depending on their spouse’s income to pay debts that were in their name.
  • They lost their job and no longer have the income source that they were depending on to repay their debts.
  • They have a severe illness or injury that has left them with astronomical medical bills. This is particularly common because costs of medical care have skyrocketed in recent years while most people’s wages have remained more or less stagnant.


2. “You can go on a spending spree just before you file and you won’t have to pay back for it.”


People often get themselves in big trouble by believing this one. Charging exorbitant amounts just before your bankruptcy is considered fraud. Not only can you face criminal charges — you will also be unable to discharge debt that is incurred frauduously. 


3. “Everything you own will be lost.”


You will not lose things like your house, vehicle, or clothes. This is because certain possessions are considered “exempt.” You don’t have to worry about bankruptcy landing you in a homeless shelter.

Of course, certain types of property can be used to repay your creditors. If you have luxury extras, they will probably be sold and applied to your debt.


4. Filing for bankruptcy is very difficult.


No way! If you have an experienced bankruptcy attorney by your side, you can navigate the process and get a fresh start without a huge amount of trouble. If you think this is the right path for you, contact Hedke Law Firm at (909) 579-2233 to discuss the next steps.