Thankfully, the stigma from bygone generations about filing for bankruptcy is largely gone. Most residents of South Florida probably know someone who has filed for bankruptcy at least once.
Still, there are a lot of myths about the bankruptcy process that are still floating around.
These myths might scare Miami-area residents off from filing for a bankruptcy even though they are excellent candidates.
Creditors themselves circulate some of these myths because they do not want their debtors to get bankruptcy protection since that means the creditor will get paid less.
Other myths are just out there in society, perhaps a holdover from the idea that people who file bankruptcy are somehow irresponsible and deserve punishment.
Bankruptcy is not supposed to be a punishment
The truth is that many responsible, hard-working people have to file for bankruptcy.
Job losses, medical emergencies and business failures can happen to the best of us. No one should feel embarrassed to file for bankruptcy.
The process is only supposed to be a way of fairly settling up on debts if a person is not able to pay as expected. The debtor does what they can and, in most cases, can walk away with a fresh start.
On a related note, filing bankruptcy per se will rarely if ever cost a person their job or their career. Legal protections may even apply to employees who file for bankruptcy.
Likewise, debtors often are able to get loans surprisingly quickly after they file for bankruptcy. It is possible to rehabilitate one’s credit after a bankruptcy filing.
It is also possible that they will have to turn over some property, but exemptions keep the bankruptcy process from leaving a person destitute.
Bankruptcy can be straightforward and beneficial
With the right legal help, bankruptcy can be relatively simple when compared with other legal proceedings.
Yes, bankruptcy involves filing a formal request in federal court and answering detailed questions about one’s finances. Filing for bankruptcy does take some time, resources and effort.
However, in most cases, the process is not controversial, and the benefits are well worth the relatively modest amount of time spent.
On that note, a person should not assume that they have a debt that bankruptcy cannot help without first speaking to an experienced bankruptcy attorney about their options. Even if some of their debt is not dischargeable, bankruptcy may still offer advantages.