Debunking Three Common Myths About Chapter 7 Bankruptcy

Law Blog

Chapter 7 bankruptcy is the most common type of bankruptcy filed by the average person. If you are drowning in credit card debt or medical bills, chapter 7 bankruptcy can help you get your financial life back on track. However, there are many myths floating around out there about chapter 7 bankruptcy. If you are considering filing for bankruptcy, you will want to learn the truth surrounding these myths. Here are three common myths about chapter 7 bankruptcy and the truth surrounding them. 

You Will Lose Everything You Own By Filing for Bankruptcy

One of the myths surrounding chapter 7 bankruptcy is that you will lose everything if you filing for bankruptcy. But this is not the case. As long as you can make the payments, you can typically keep your home and your car when you file for bankruptcy. If you have vacation homes or multiple cars, you may lose those items when you file. But you are typically able to keep the car you use to commute in or take your children to school in, as well as the home that you reside in. 

You Don't Have to Pay Anything Back By Filing for Bankruptcy

Another myth surrounding bankruptcy is that you don't have to pay anything back if you file. Some people believe that they can walk away from all of their debt. When you file for chapter 7 bankruptcy, you are put on a repayment plan that you can afford. In most cases, the debt will not be repaid in full. But you will be paying some money to your outstanding creditors.

There's No Reason to Spend Money on a Lawyer When Filing for Bankruptcy

The last common myth surrounding chapter 7 bankruptcy is that there is no reason to spend money on a lawyer. While you can file chapter 7 bankruptcy without a lawyer, it can end up costing you more. An attorney can work to keep your repayment plan as low as possible and help to ensure that all of your debts are listed and discharged. This ultimately can save you money in the long run. 

Chapter 7 bankruptcy is a smart financial move for some people and a poor decision for others. Learning about myths related to chapter 7 bankruptcy can help you to learn the truth about filing. If you think bankruptcy may be right for you, consult with a chapter 7 bankruptcy lawyer today to find out if you meet the legal requirements and whether it would help you. 


9 August 2018