Bankruptcy Lies People Love To Tell

Lies About Bankruptcy

It’s a funny thing that in a society where a sizable portion of the population is mired in mountains of debt, the idea of discharging those debts is often seen as less than admirable.  Many people will even go as far as criticizing those who file bankruptcy despite not knowing their full financial circumstance. However, you rarely hear a complaint out of those same finger wagging bankruptcy opponents when large companies restructure their debts using the same bankruptcy tools.  A matter of fact, when an ordinary individual decides that they need to discharge their debts in bankruptcy, many of these naysayers have a slew of general falsehoods they spread.

Below are just a few of their favorite lies:

  1. You may be able to keep some of your assets but you won’t keep much.  This particular falsehood is a spinoff of the very big lie that you will lose all of your assets in bankruptcy.  Well, with the free access to information via the internet, bankruptcy opponents have become more subtle.  Instead of saying that you will lose everything, they say you will lose almost everything.  The truth is that most American debtors don’t have many assets to begin with, especially compared to what the bankruptcy courts allow you to keep via bankruptcy exemptions. And Texas bankruptcy exemptions are particularly generous so that the average debtor doesn’t lose any of their important assets.
  2. Your retirement account will be lost in bankruptcy.  Retirement accounts enjoy generous bankruptcy exemptions which protect most bankruptcy debtors.  Senior citizens filing bankruptcy right before they retire or during their retirement years benefit greatly from the protections offered to retirement accounts in bankruptcy.  If they receive benefits from their retirement account and social security payments, seniors in bankruptcy can discharge their debts while their exempt income goes untouched by creditors.
  3. You don’t have enough debt to qualify for bankruptcy.  Another tactic that bankruptcy opponents use to dissuade debtors from filing is downplaying the severity of their financial issues and the debtor’s ability to qualify for bankruptcy.  The truth is that there are no minimums on the amount of debt you must owe in order to file bankruptcy.  Technically you could file bankruptcy if you only had a few thousand dollars of debt. If you want to find out if bankruptcy is a good option for you, speak with a qualified bankruptcy attorney about your financial situation.