When you’re in over your head with debt and aren’t sure how to move forward, filing for bankruptcy can give you the fresh start you deserve. Once your case is settled, you’ll be able to get your finances back on track without having to worry about creditors hounding you for payments you still owe.
Though bankruptcy can be a very useful tool, there are a few myths that keep people from working with a South Carolina bankruptcy attorney and filing when they should. Let’s take a look at some of the common myths and why they’re wrong.
1. Bankruptcy Stays on Your Credit Report Forever
Bankruptcy will show up on your credit report, and it will stay there for a while even after your case is settled. But that doesn’t mean it will stay on your report forever. When you file for Chapter 7 bankruptcy, the bankruptcy will be visible on your report for up to 10 years. After 10 years, it falls off your report.
This means lenders, insurance providers, landlords, and anyone doing a credit check may be able to see that you filed for bankruptcy for 10 years after you file. But once you hit that 10-year mark, it’ll look like it never happened.
2. Your Credit Score Will Never Improve After Filing
Filing for bankruptcy will cause your credit score to drop, and the higher your score is when you file, the more noticeable that drop will be. It’s not uncommon for bankruptcy to cause your score to drop by several hundred points. However, contrary to popular belief, you can improve your score over time. Here are a few things you can do to boost your score faster:
- Pay your bills on time and in full each month.
- Take out a credit-builder loan or secured credit card and pay it off in full.
- Only borrow what you need and what you can afford to repay.
By being financially responsible, you’ll see your score improve. Even better, your score will start increasing long before your bankruptcy falls off of your credit report.
3. Filing for Bankruptcy Means You’re a Failure
Filing for bankruptcy does not mean you’re a failure. People file for many different reasons. Perhaps you started a business and got in over your head with personal debt trying to get things off the ground. Maybe you borrowed more than you could afford to repay after your home was damaged in a hurricane. Or perhaps you got laid off and had to rely on credit cards to make
ends meet.
Whatever the reason, filing for bankruptcy doesn’t mean you’re a failure. It means you hit a rough financial patch and need help getting things back on track.
4. All Debts Are Dischargeable
Unfortunately, Chapter 7 bankruptcy won’t discharge all of your debts. Some will still be your responsibility to pay, even if your finances are tight. This includes debts such as:
- Student loans
- Certain back taxes
- Child support debt
- Alimony payment debt
- Court-ordered fines
If you’re not sure which debts you can discharge and which you’ll need to repay, speak with your South Carolina bankruptcy attorney.
5. Bankruptcy Is a Quick Fix
Bankruptcy isn’t something you can file and settle overnight. It takes time to compile all the necessary documents, work with your bankruptcy attorney, and present your case to the court. It’s not uncommon for the full bankruptcy process to take months before your case is settled. Of course, working with an experienced South Carolina bankruptcy attorney can help you speed things up and ensure that errors don’t delay your settlement.
Filing for Bankruptcy Can Be a Good Option
If you’re considering filing for bankruptcy, but you’ve been putting it off because of these myths, don’t buy into the misconceptions. Schedule a consultation with Lam Law Firm today to learn more about your options.
