Truths and Myths about San Bernardino Bankruptcy

There are a lot of myths, rumors, and misconceptions about bankruptcy that may cause even the most educated individuals to feel uncertain when it comes to filing for bankruptcy relief in San Bernardino County. But the truth of the matter is, no two bankruptcy cases are ever the same. Your specific circumstances place you in a unique position, and only you can ultimately determine if bankruptcy is the solution you need. That’s why it is so important to educate yourself about the truth when it comes to San Bernardino County Bankruptcy. The following are just some of the myths people allow to dissuade them from taking advantage of their legal right to financial relief under bankruptcy:

Myth: Filing for bankruptcy will ruin my credit forever.

Fact: Filing for bankruptcy may actually help to improve your credit over the long term. Delinquencies on items such as credit cards, utility bills, loan payments, and other lines of credit will harm your credit score indefinitely. If you cannot pay your bills on time, your credit is already damaged. Filing for bankruptcy allows you to wipe the slate clean and start over. If you establish responsible financial habits after your debts are discharged, you will be able to improve your credit over the long term. Your credit will be stronger after the bankruptcy than it was before.

Myth: Filling for bankruptcy could cost me my job.

Fact: it is against the law to fire an employee based upon his or her decision to file for bankruptcy. Your employer cannot fire you because you have filed for bankruptcy, however, filing for bankruptcy will not prevent you from losing your job due to other circumstances. If you file for bankruptcy and are fired shortly thereafter, you may be able to sue your employer and recover damages. If you are worried about your employment situation at the time of your bankruptcy filing, talk to us and we will help you to understand how the laws apply to your particular San Bernardino County bankruptcy case.

Myth: If I file for bankruptcy, I will owe taxes on all of my forgiven debt.

Fact: You won’t owe taxes on debts discharged under bankruptcy. However, you could owe forgiveness taxes if your home is sold via a short sale, or your lender accepts a deed in lieu of foreclosure. Talk to our team of trusted San Bernardino County Bankruptcy Attorneys about your options for retaining your home, or liquidating your home under a bankruptcy discharge if you are concerned about the forgiveness tax.

Myth: If I don’t pay off my debts, I could go to jail.

Fact: You won’t go to jail for debts you’ve incurred unless your debt is the result of willful tax evasion, tax fraud, or criminal activity. You cannot be imprisoned for debt you’ve incurred on credit cards, loans, or your mortgage. Even if a creditor wins a lawsuit against you for debts you owe, you will not spend time in jail.

Myths such as these can cause people to have doubts about taking advantage of bankruptcy and the financial protection it can provide. If you are concerned about these issues or any others, please talk with one of our experienced San Bernardino County Bankruptcy Attorneys right away. We will be able to provide clarity, solid legal advice, and reliable information that will allow you to make an informed decision about whether or not bankruptcy is right for you.