For many people facing overwhelming debt, bankruptcy feels like a last resort—but also a confusing one. Misinformation, fear, and stigma often prevent people from seeking the help they need. At JPP Law, we frequently speak with clients in Wilkes Barre who are hesitant to explore bankruptcy because they’ve heard myths that simply aren’t true.
If you’re struggling financially and wondering whether bankruptcy is the right solution, it’s time to separate fact from fiction. Below, we break down some of the most common bankruptcy myths and explain what really happens when you file.
Reality: In most cases, you don’t lose your home, car, or personal belongings when you file for bankruptcy.
One of the biggest fears people have is that bankruptcy will leave them with nothing. The truth is that both Chapter 7 and Chapter 13 bankruptcy include protections that help you keep essential assets. These protections are called exemptions, and they vary by state. In Pennsylvania, you may be able to protect equity in your home, your car, retirement accounts, household items, and more.
In Chapter 7, non-exempt assets may be sold to pay creditors—but most people who file don’t own non-exempt property, so they don’t lose anything. In Chapter 13, you keep your assets and repay part of your debt over time through a structured repayment plan.
Reality: Bankruptcy will impact your credit, but it’s not permanent—and it may be the first step toward rebuilding.
Yes, a bankruptcy filing stays on your credit report for 7–10 years depending on the chapter. But if your credit is already suffering due to missed payments, high balances, or accounts in collections, filing for bankruptcy can actually stop the bleeding and give you a chance to rebuild. Many people see credit score improvements within 12 to 18 months after discharge by making consistent, on-time payments and using credit responsibly.
You’ll also be eligible for new credit—such as secured credit cards or small personal loans—sooner than you might think. Bankruptcy gives you the chance to wipe the slate clean and start over, which can be more effective than continuing to juggle debt you can’t afford.
Reality: Bankruptcy filings are public record, but most people won’t ever find out unless they’re specifically looking for it.
Unless you’re a public figure or your case involves significant assets, your bankruptcy won’t be broadcast. It’s not published in the local newspaper, and employers, neighbors, and friends typically won’t be notified. The only people who are officially informed are your creditors and, in some cases, your co-debtors.
It’s also illegal for employers to fire or discriminate against you solely because you filed for bankruptcy. Your financial future is your business—and the decision to file is about regaining control, not announcing your situation to the world.
Reality: Bankruptcy is for people who are doing their best—but still can’t keep up.
Life is unpredictable. Job loss, divorce, medical emergencies, and rising living costs can derail even the most careful financial planning. Bankruptcy exists to help people who are facing legitimate financial hardship—not to punish anyone for “bad behavior.”
In fact, the U.S. bankruptcy system was designed to give people a second chance. It’s a responsible and legal way to resolve debts you simply can’t afford. Filing doesn’t mean you failed—it means you’re ready to take control and rebuild.
Reality: Many people keep both.
If you’re current on your mortgage or car loan and can continue making payments, filing for bankruptcy won’t automatically cause you to lose these assets. In Chapter 7, you can reaffirm secured debts (like a car loan) if you want to keep the property and continue paying. In Chapter 13, you may even be able to catch up on missed payments through your repayment plan and avoid foreclosure or repossession altogether.
A bankruptcy attorney in Wilkes Barre can walk you through the property exemptions that apply in Pennsylvania and help you develop a strategy to protect what matters most.
Reality: You can start rebuilding your credit immediately after bankruptcy is discharged.
While the bankruptcy stays on your credit report for several years, that doesn’t mean you can’t get credit during that time. Many people are surprised to learn they can qualify for a secured credit card, retail card, or even a car loan within a year or two of filing—sometimes sooner.
The key is to use new credit wisely, keep balances low, and make all payments on time. With good habits, your credit score can recover faster than you might expect.
Reality: You must list all your debts when you file for bankruptcy.
Some clients ask if they can leave out a specific loan from a family member or a bill from a provider they want to keep working with. Unfortunately, the answer is no. Bankruptcy law requires you to disclose all debts—secured and unsecured. That said, you’re allowed to voluntarily repay any creditor after the bankruptcy if you choose to do so.
Being thorough and honest is crucial for a successful filing. Omitting debts, assets, or income could result in your case being dismissed or your discharge denied.
Reality: Bankruptcy has upfront costs—but it often saves far more in the long run.
While it’s true that bankruptcy involves court filing fees and attorney costs, these expenses are small compared to the amount of debt most people are trying to resolve. Chapter 13 allows you to spread legal fees into your repayment plan, and many bankruptcy attorneys—including our team at JPP Law—offer flexible payment arrangements.
Trying to avoid bankruptcy can lead to drained savings, maxed-out credit cards, and endless interest payments. Filing sooner can prevent deeper financial damage and allow you to start recovering faster.
Once you decide to file, your attorney will help you prepare the necessary documents and file them with the bankruptcy court. You’ll need to complete a credit counseling session, provide details about your finances, and attend a short hearing called the 341 meeting of creditors.
From there, you either receive a discharge of your debts (Chapter 7) or begin your repayment plan (Chapter 13). Throughout the process, your bankruptcy attorney ensures your paperwork is correct, your rights are protected, and that you meet all legal requirements for a successful outcome.
The automatic stay kicks in as soon as your case is filed, stopping collection calls, lawsuits, garnishments, and other creditor actions. This legal protection gives you breathing room and peace of mind while you work toward a solution.
If you’ve been putting off bankruptcy because of fear or misinformation, we’re here to help you move forward with clarity and confidence. At JPP Law, we believe everyone deserves a second chance—and we’re committed to making the process as simple and supportive as possible.
Whether you’re just exploring your options or ready to file, our experienced team will answer your questions honestly and help you decide if bankruptcy is the right step for your future.
Contact us today to schedule a consultation with a knowledgeable bankruptcy lawyer in Wilkes Barre. Let’s debunk the myths together—and start building a better tomorrow.
