Top 10 Bankruptcy Myths

Bankruptcy has a bad reputation. Most, if not all, of these negative feelings about bankruptcy are due to myths that have been passed on from one misinformed person to the next. We are here to set the record straight and show you that those myths are completely wrong. With bankruptcy experience dating back to 1972, our firm can assure you that you will not have to go through any of the following experiences.

1.) Myth: “You can’t get a mortgage after filing for bankruptcy.”

Truth: You can oftentimes qualify for conventional mortgage financing in as little as 18 months after getting a bankruptcy discharge.

2.) Myth: “You can’t finance a car purchase after filing for bankruptcy.”

Truth: Many debtors qualify for auto financing immediately after getting a bankruptcy discharge.

3.) Myth: “You will never get credit again.”

Truth: After receiving a bankruptcy discharge, your credit improves because you have less debt – which is what lenders want to see.

4.) Myth: “You will be discriminated against when you file a bankruptcy.”

Truth: It is illegal for any public entity to discriminate against you because you filed a bankruptcy. Employers cannot fire you because you filed a bankruptcy. You cannot be denied student loans because you filed a bankruptcy.

5.) Myth: “You will lose your house and car when you file a bankruptcy.”

Truth: The vast majority of Minnesotans who file for bankruptcy not only keep their house and car, but they lose no assets when they file a bankruptcy in Minnesota. 

6.) Myth: “Bankruptcy will lower your credit score.”

Truth: Receiving a bankruptcy discharge usually increases your credit score! Why? Because most, if not all, of your unsecured debt is eliminated. 

7.) Myth: “You don’t owe enough to file for bankruptcy.”

Truth: Everyone’s situation is different - $8,000 in debt is not much for some, but for others it is unbearable. If you are reading this, the debt is too much. There is no minimum debt requirement to file a bankruptcy in Minnesota.

8.) Myth: “You can’t afford to file a bankruptcy in Minnesota.”

Truth: Kain & Scott offers zero down on our attorney fee and interest free payments of $100-$200 a month assuming someone signs a promissory note for you.

9.) Myth: “Everyone will know you filed a bankruptcy.”

Truth: Bankruptcy records are not easily attainable as some public records. When is the last time you checked out someone’s divorce records? They are public documents in every country! To obtain bankruptcy documents, you would first have to go to a password protected site. We have yet to have a single client tell us this has happened to them. 

10.) Myth: “You will regret filing a bankruptcy.”

Truth: Clients tell us all the time they have two regrets. The first being that they should never have waited so long to file the bankruptcy to begin with. The second being that they started with another law firm, and wish they would have started with Kain & Scott first! We are honored and humbled every time we hear these words. 

As you can see, there are many bankruptcy myths and misconceptions. When you know the truth, you are able to see how beneficial a bankruptcy can be. If you would like to learn more about bankruptcy to see if it is right for you, schedule a free bankruptcy consultation. At no cost to you, we will provide the financial advice you need to determine which debt solution is right for you.