When someone is on the verge of filing for bankruptcy, they have a myriad of questions about the process and the ramifications of a bankruptcy filing. Quite often, a prospective client will come to one of our four offices (Dade County, Broward County, and two in Monroe County) with preconceived ideas of what bankruptcy will do to their life and financial health. Many times, these ideas are inaccurate. Below are three of the most common misconceptions about bankruptcy that we hope to dispel:
1. Common Misconception: a Bankruptcy Filing Will Destroy Your Credit Score
This is probably the biggest misconception – that the act of filing for bankruptcy will automatically cause your credit score to plummet. This is not accurate. In reality, the proverbial jury is out regarding the effect a bankruptcy filing has on an individual’s credit score. The reality is that when someone is contemplating bankruptcy, they are probably late on multiple bills, which will have an adverse effect on your credit score. This means many people, prior to even filing for bankruptcy, already have a lowered credit score.