Without bankruptcy protection, it would be impossible for some people to ever gain a fresh financial start. While filing for this type of financial protection is relatively common, it is still a highly complicated area of law, and you may not fully understand the nuances of this legal area. It is vital for you to ensure that you are not giving credit to some myths about bankruptcy protection that can give you the wrong idea of what to expect from this type of legal procedure. 

Myth: It Is Easy To Hide Or Transfer Assets Before Filing For Bankruptcy

One of the worst aspects of bankruptcy is that there is a chance that some of your assets will be liquidated to raise money to pay your creditors. Unfortunately, some people will attempt to cheat the system through a variety of means. Often, this will entail giving or selling assets to friends for far less than their value in an attempt to keep control over these items. 

The court will closely evaluate your financial history, and if these discrepancies are identified, the court can reverse the transactions. This may result in expensive fees and penalties, which can further compound the financial troubles you are facing. Luckily, your attorney will be able to help you protect many of your most prized assets from being sold to pay your creditors.

Myth: Bankruptcy Will Eradicate All Of Your Debts

Another routine belief among clients is that filing for bankruptcy protection will erase all of the debts that they have accumulated. While a bankruptcy filing can drastically reduce the amount of your debts, there are some that will largely be unaffected by this type of filing. For example, student loans, criminal penalties and civil judgements may not be eligible for being discharged through bankruptcy. 

In order to determine exactly what you are able to discharge, you will need to speak to an attorney. When there is a debt that you are unable to have discharged, your attorney may be able to negotiate easier payment terms to help reduce the amount of stress these bills cause. 

Filing for bankruptcy protection may be the only way to protect yourself against your creditors when you are facing financial troubles. Knowing that you cannot attempt to transfer your assets before filing for bankruptcy and that many of your debts may not be discharged, it will be possible for you to have a more thorough understanding about this form of financial protection. Also speaking with a chapter 13 or chapter 7 bankruptcy attorney will help to gather more information and build your case.