Most California residents who are going through difficult financial circumstances know that bankruptcy is an option that is available to them. Many, however, hold a range of misconceptions about the process of personal bankruptcy. These myths can make it difficult for individuals to make the best possible financial decisions, and can serve to trap them in an untenable financial situation for far longer than is necessary. It is important to work through the facts and the fiction surrounding bankruptcy.
One myth that many hold is the idea that filing for personal bankruptcy means that an individual or family will lose all of their hard-earned assets. Fear over losing one's house or vehicle keep many people from exploring bankruptcy as an option. In reality, however, there are protections within the bankruptcy process that can ensure that a consumer is able to retain their most important assets. Many people emerge from the bankruptcy process with their homes and vehicles intact.
Another myth surrounding bankruptcy is that it is a simple process that can be completed on a do-it-yourself basis. In reality, the laws that govern personal bankruptcy are vast and complex. In addition, bankruptcy reforms implemented in 2005 have made it increasingly difficult for individuals to file on their own. By working with an attorney who is familiar with the rules and law pertaining to personal bankruptcy, filers can be assured that their financial interests are being looked after, and that nothing is being overlooked within the paperwork process.
When considering personal bankruptcy as a debt relief option, California consumers must ensure that they are making decisions based on fact, not myth. This is a serious financial move, and one that should be made only after the prospective filer is fully informed of the bankruptcy process and its likely outcomes. Those who believe that this path may offer the right fit for their financial needs should make an effort to learn more.
Source: InvestorGuide.com, "Debunking Four Myths of Bankruptcy", Jon Clarke, April 3, 2014