Common Misconceptions about Bankruptcy

by | Aug 16, 2012 | Lawyers

Top Stories



The lack of understanding about the whole process of filing for bankruptcy has created several misconceptions. Although these concerns are not legitimate, still these mistaken beliefs have prevented some business owners from taking advantage of what a bankruptcy option in Lawrenceville can offer. If these myths hold you back from filing a bankruptcy petition to help you solve your financial problems then it is recommended to evaluate each of this myth and try to understand how the bankruptcy petition is filed and processed.

If you try to talk to other business owners, you will probably hear from some that you will lose everything if you file for bankruptcy. Losing your hard earned assets or transferring them to your creditors is normally the biggest fear of every business owner. Although your creditors may uphold the legal rights for asset liquidation, there is no assurance that it will absolutely happen in any bankruptcy case. At the time your petition for bankruptcy has been filed, your state’s court will issue a notice to your creditors, informing them to temporarily stop any repossession or collection activities. Typically, if your case falls under Chapter 7 there is a higher risk for your secured assets to be liquidated as compared to Chapter 13. The district court will evaluate your case and they are the ones who will make the final decisions. They have the final say to which of your assets should be liquidated or seized and which of your assets are allowed to be retained under your ownership.

Furthermore, there are also exemption regulations that will protect some of your assets in the event of bankruptcy implementation in Lawrenceville. Most of the time, your house, cars, personal properties, and all other investment fund accounts you have may be qualified for liquidation or seizure exemption.

In times of financial difficulties, many businessmen are troubled about their reputation. You should not stress yourself. Having problems paying off your debts doesn’t mean you are a bad businessman. You have to realize that there are many different reasons why business owners end up filing for bankruptcy. Most of the time, bankruptcy is caused by different factors that are out of our control. It is a fact that bankruptcy cases do become an element of public record but the availability of this information will only be used for legal purposes. The court will not waste its time notifying your colleagues about your financial difficulties unless you will tell them. The federal government has created laws that forbid company discrimination because of a bankruptcy situation.

Lastly, many businessmen mistakenly believe that their credits will be negatively affected if they file for bankruptcy. This is absolutely wrong, as a matter of fact bankruptcy can even improve your credit after your pay-off your debts. In this case, you are actually rebuilding your credit. You will still have the opportunity to find a best deal on loans after your business bankruptcy. Today, there are many creditors who offer loans to post bankruptcy clients in Lawrenceville. These creditors actually believe that you will work hard to demonstrate credit worthiness.