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Only people with zero spending control file for bankruptcy, right? Nothing could be further from the truth, say bankruptcy attorneys nationwide. Just ask any bankruptcy lawyer why their clients are driven towards bankruptcy, and you will hear the same reasons repeated: job loss, divorce, injury, illness, or foreclosure. The truth of the matter is that “bad things happen to good people.”

Virtually anyone can file for bankruptcy, you might be surprised. Every day, people from all different educational backgrounds and walks of life come into our office, seeking much needed debt relief. We’d like to shatter some persistent myths and stereotypes once and for all!

Most Filers Blew Their Money
This is one of the biggest, most widespread misconceptions about Chapter 7 filers: the idea that they were irresponsible with their finances. Most Chapter 7 filers decided to file for bankruptcy due to unfortunate circumstances that were completely out of their control.

Bankruptcy Will Destroy My Credit
If you’re like most people, you’ve fallen behind on your payments and your fico score has already taken a big hit. If your credit score is already very low, bankruptcy may actually improve your credit score overnight. If your pre-filing score is in the 500s, your post-discharge score could actually increase by 30 or more points.

Borrowing opportunities increase after the discharge, credit card offers come rolling in the mail, and by rebuilding your credit you could realistically achieve a score in the 700s within 2 to 4 years of the discharge.

I Will Lose All of My Assets & Property
This is a very common fear, but the good news is that it is unfounded. The majority of a debtor’s property, including their home and vehicles are exempt and the debtor doesn’t have to lose anything. Upwards of 90% of Chapter 7 cases are called “no asset cases” where none of the debtors’ property is sold to pay off creditors.

All Debts Can Be Discharged in a Chapter 7
Not all debts can be discharged in a Chapter 7 case. If you owe thousands in student loan debt, or hundreds in old traffic tickets, they cannot be included.

The kinds of debts that you cannot include in a Chapter 7 include: student loans, court-ordered fines or penalties, victim restitution, child support, and spousal support. However, these debts can be included: medical debt, personal loans, and credit card debt, which can add up to tens of thousands of dollars for some debtors!

At Dethlefts, Pykosh, Shook & Murphy Law, we believe that bankruptcy is a serious decision, and one where you should weigh all of your pros and cons before deciding to proceed forward. In many cases, bankruptcy offers individuals and couples the second chance at a fresh start that they desperately need.

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For a thorough explanation on how we may assist you alleviate you financial distress, request a free case consultation by filling out the form below. We have offices in York, Carlisle and Chambersburg.