10 Bankruptcy Myths

bankruptcy myths - shaw defense

There are lots of myths out there surrounding the theory of bankruptcy. Most of these lies are are designed to scare people away from seeking help by putting an end to their debt. Bankruptcy is usually one of the ways offered by creditors to get rid of your debts and give you a fresh financial start. However, if you are considering bankruptcy and are afraid of what you have heard, read on to understand some of the myths and your creditors will not tell you.

Wages can be garnished?

The state constitution prohibits wages garnishing for personal services. This means employers have no rights to withhold your paycheck for certain amounts of unpaid debts. Your creditors are less likely to explain to you the exemptions and protections that the constitution gives you.

There are no alternatives incase you are sued for credit card debt

If the original creditor sues you, then there is little if any defense for you. Depending on the debt accrued it may be better for you not to hire an attorney to defend you. But there could be a defense if you have been sued by an assignee of the original creditor.

There are no right options for credit card and other unsecured debts?

Having a bankruptcy record to your name is not a very good move. Bankruptcy is a permanent public record that will haunt you for the rest of your life. When most people waste their discharge on unsecured debts, they will most likely take up being declared bankrupt, however, this is not always a good move since there are other options.

There are no alternatives for credit card debt other than declaring bankruptcy

It is possible that creditors do not know much about any other alternatives. They also want your business and bankruptcy serves a purpose.

There is no strategy to prevent loss of assets during debt collection

During debt collection the asset protection strategy should be applied to prevent you from losing your assets. Unfortunately, creditors are not likely to give you advice about the numerous ethical strategies according to the types of judgment and collection that you are facing.

You should not consider Debt Settlement Company that settles debts with the discount they propose

Most probably, the best option is not to take up the offer. The problem with this option is the number of unscrupulous company that usually takes advantage of your situation. The discount offered is less than the amount you can settle the debts if you exercise a little patience and pay at a later date.

Do not accept offers from Companies that propose to fix your credit

There is little if any legal way to fix your credit report. Though some items can temporarily be removed, they will always somehow resurface on your credit reports. It is also expensive and unscrupulous way to remedy the situation. Therefore, this method is not the best and should be avoided.

Credit companies can take your assets at will. There are no exempt assets.

Wrong, credit companies must obtain a judgment against you before taking over your assets. There are several exemptions which include your house, your car, tools of trade, wages and many other items. However, assets such as real estate, stock accounts, and some bank accounts are not exempted.

You can be put in jail for failure to pay unsecured debts

Unless you are found in contempt of court, you should not be afraid of being jailed. Your creditors have no right to put you to jail because of failure to clear your unsecured debts. These are only empty threats.

Enroll in programs offering financial assistance

You should be wary of companies that offer non-profitable financial assistance. This is because most of the time, these companies are fraudsters out to get your money and rarely pay off debts.

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