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Possible misconceptions about the bankruptcy process

On Behalf of | Apr 7, 2023 | Bankruptcy Law

While facing dire financial challenges can be stressful enough on its own, there may be some scenarios in which the idea of preparing to seek debt relief can also seem an intimidating concept. Individuals in Maryland who encounter similar hardships in life might wonder if bankruptcy may be just the tool with which to seek much needed relief, but they may have reservations about this process. Some sources of hesitation may stem from misconceptions about bankruptcy and addressing such topics might be vital to preparing to make informed choices about one’s options.

Common misconceptions

One of the most common misconceptions about bankruptcy could pertain to the notion that one might lose most or all possessions in the process. However, while asset liquidation may be a factor in Chapter 7 bankruptcy, that does not mean a person will lose everything, as some assets may be exempt from liquidation. With Chapter 13 bankruptcy, a person may retain possession of all assets while forming a strategy to reorganize finances and pay back certain portions of debt via a repayment plan.

Another potential misconception could involve the notion that bankruptcy might spell ruin for one’s financial future. While filing for bankruptcy is a major decision, sometimes it could also be the best path with which to seek relief and begin working toward building a brighter financial future. Some may also worry that filing for bankruptcy indicates some form of personal failure, but sometimes it might not be possible to keep financial challenges at bay and bankruptcy is a tool that could help individuals regain control of their futures.

Seeking guidance about bankruptcy

While debunking misconceptions about bankruptcy may be vital to helping one determine if this might be a viable path, it can also be challenging at times. Those who have questions about this process could consider speaking with a bankruptcy attorney for advice in exploring what this tool might have to offer. An attorney can help a client better understand what to expect from this process and assist in preparing a thorough strategy with which to reduce or eliminate his or her debts via the proper paths.