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About Bankruptcy Myths

Orange County Bankruptcy Attorneys

Since talking about personal finances is generally considered taboo in society, there is an abundance of misinformation about bankruptcy. Many people are scared to learn what it even means when it could actually save them from financial disaster and set them on a path to recovery. In many cases, you end up in a much better position after filing for bankruptcy than if you had continued to not pay your creditors. You essentially give yourself a blank slate and are able to rebuild your credit from there.

Here are several myths regarding bankruptcy:

“If I File for Bankruptcy, I Will Lose All My Property”

This is completely false. Approximately 95% of individuals who file for bankruptcy retain their property. Many types of assets are protected by California State bankruptcy laws, and when you contact an Orange County bankruptcy attorney from The Law Offices of Joseph M. Tosti, APC, an attorney can inform you how this will work in your case, and what property is exempt in California law.

“Only Deadbeats Would File for Bankruptcy”

Every year, countless, hardworking individuals across the United States file for bankruptcy, all of them coming from different walks of life. Doctors, athletes, teachers, veterans, and more all file for bankruptcy. Whether their financial situation deteriorated due to the loss of a loved one, being let go from a job, sustaining a serious injury, or otherwise, financial ruin can happen to anyone. It is incredibly insulting to people who have suffered from issues out of their control to label them as “deadbeats”. Being able to file for bankruptcy is an available legal option because society realizes that some people simply just need a fresh start.

“Both Spouses Are Required to File for Bankruptcy Even if Only One is in Financial Trouble”

This is false. One spouse is allowed to file for bankruptcy without affecting the other at all. Individuals who have spouses that file for bankruptcy often benefit because it prevents the creditors from further harassing their household for payments. In a majority of cases, a significant portion of the debt is just under one spouse’s name. That individual can file for bankruptcy without affecting the financial well-being of their spouse.

"It is Okay to Charge Your Credit Cards Before Filing for Bankruptcy."

Don't try this - it is not true. If you recently charged your credit cards a number of times just before filing for bankruptcy, these charges will not be allowed to be discharged with other debts, and you will owe those debts.

"If I File for Bankruptcy, I Will Never Have Good Credit Again"

If you are thinking about filing for bankruptcy, it is probable that your credit is already not in great shape. In fact, when you file for bankruptcy, your amount owing will often show $0.00. This is better than an endless stream of late or overdue credit card and loan payments. Ordinarily, if you have a paycheck and job, you can reestablish your credit in two to three years after filing for bankruptcy.

Contact an Orange County bankruptcy attorney from The Law Offices of Joseph M. Tosti, APC if you are seeking an experienced lawyer to assist you in legal debt relief actions. Call (949) 245-6288 to set up your free consultation.

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