The idea of bankruptcy is scary. There is a negative stigma associated with it and most people do everything in their power to avoid having to consider it. However, a lot of the fears associated with bankruptcy are unfounded and simply put, are not true.

1. My Credit Will Be Ruined Forever

A lot of people believe that they will never recover from filing bankruptcy. They believe that their credit will forever be tarnished. However, the facts show that this is completely false. The vast majority of people who file bankruptcy actually see a dramatic improvement to their credit scores. The reason is simple, prior to bankruptcy they have an enormous amount of debt reporting to their credit, after bankruptcy, they have almost zero debt. When you file bankruptcy it’s almost like you are 18 years old again. You have a blank canvas and if you take the right actions, can drastically improve your credit.

Buying a house is the most credit intensive process that most people experience. If you file a chapter 7 bankruptcy, you can be eligible to purchase a home within 2 years from your discharge date. 

In chapter 13 it’s even shorter, you can be eligible to purchase a home in as little as 12 months after the filing.  

2. I Will Have To Give Up Assets

Most people are scared that if they file bankruptcy they are going to have to give up their home, vehicles or retirement accounts.  This is not true.  When you file bankruptcy you are able to use property exemptions to protect your property.  Check out this article I wrote to give you a better understanding of exemptions.  

For 99% of my clients, they are able to protect all of their property because the exemptions in Texas are so powerful. The good news is, you can do a free exemption check with my office by calling the number below.

3. People Will Find Out

No one yells from the rooftops that they had to file bankruptcy. It is embarrassing and not something we want people to know about. In the old days, people who filed bankruptcy were listed in the newspaper, but that isn’t how it’s done now. 

Filing bankruptcy is of “public record” but you must have a pacer account to access the bankruptcy records.  Most people don’t have a pacer account and have no clue what pacer is. A person would have to actively search your name on pacer to find your case. The other place bankruptcies are disclosed is on your credit.  Anyone who runs your credit will be able to see that you filed for bankruptcy.