Personal Injury & Bankruptcy Lawyer in Lehighton, PA

JPP Law has heard our clients’ worries and is ready to talk about them. Here are the top three bankruptcy fears we have heard.

“Bankruptcy Kills Your Credit.”

Many clients come to us to discuss declaring bankruptcy and wonder why they would do such a thing when it can devastate your credit score. This is not the entire story, however. Declaring bankruptcy will damage your credit score only in the short term. Once you get on a fixed repayment schedule, and you are meeting all the decided-upon expectations, your credit score will begin recovering nicely. This is the case even though your bankruptcy will likely remain on your credit report for 7 to 10 years. The main takeaway, however, is that you will eventually have a decent credit score after declaring bankruptcy. You will once again be able to take out a mortgage or car loan.

“Bankruptcy Takes Away All My Property.”

We often hear this concern as though it were an absolute rule. Many people assume that declaring bankruptcy means only that all their property will be confiscated and sold. This is not necessarily true. Depending on your circumstances and the type of bankruptcy for which you are filing, you can exempt certain parts of your property, such as your home. Ask an attorney whether you can use federal bankruptcy exemptions to claim amounts for particular possessions you own, such as a vehicle. These exemptions are used to protect your property during bankruptcy. Other possessions may be considered nonexempt and can be used to repay your debts in bankruptcy. These may include artwork, jewelry, or newer cars.

“Declaring Bankruptcy Is Embarrassing.”

The last item on our list here is a common client concern: that bankruptcy is inherently embarrassing and will damage the person’s reputation. Perhaps this issue comes down to differences in philosophies, but we do not see declaring bankruptcy as humiliating at all. Instead, it is a structured legal process meant to help an individual become free of crushing debt and harassing creditors. If anything, your family, friends, and coworkers should respect the fact that you have chosen this responsible path forward rather than continuing to suffer in debt.