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People file for bankruptcy for a number of different reasons. Job loss, illness,  and divorce are three most common. They hit hard and quick and if you don’t have a backup plan your finances can spin out of control fast. Although bankruptcy can help, depending on your situation, it doesn’t come without judgment. If you are wondering if bankruptcy is an option for you, the attorneys at Hines Law can help. We specialize in Bankruptcy Law and have office locations throughout Worcester and Middlesex Counties.

There are several “assumptions” that people make about filers that simply are not true.

Here are the five most common assumed reasons for consumer bankruptcy.

Financially irresponsible

It’s easy to automatically think that if someone is in financial distress, they simply just don’t manage their finances very well. They spend on credit without caution. Not true. There are many unfortunate situations such as illness, job loss and divorce that yield financial troubles more often than not. These circumstances do not discriminate, it can happen to anyone and the assumption of being financially irresponsible doesn’t match the real root of the problem.

All past debts are discharged

The assumption that consumers file for bankruptcy to forgive all of their past debt is another misconception. There are several types of debt that are not dismissed. Child support, alimony, some types of student loans and most tax debts are non-negotiable. So if you assume that a filer is walking away debt free, think again.

You don’t have to pay back reckless spending before filing

Consumers that spend with abandon and throw caution to the wind before filing for bankruptcy often think their debt will be discharged. Going on a spending spree with your credit cards just before filing can be considered a form of fraud. Those debts will not be discharged. It is a misconception held by many that those last minute careless purchases will never have to be paid.

Bankruptcy ruins your credit

Some people automatically assume that bankruptcy means your credit is ruined for good. The reality is that you can start rebuilding your credit pretty quickly. If you make regular on-time payments to a secured credit card your credit score can improve with a year. It’s important to keep an eye on your credit score, one late payment can lower it quickly.  A good credit score is what lenders are looking for.

Bankruptcy is a problem solver

Many people think that filing for bankruptcy is a cure-all. Since Chapter 7 discharges certain debts and Chapter 13 allows for reorganizing your debt, neither one solves all your problems. They both bring debt relief, however, and have helped millions of people get a “fresh start”.

If you are struggling financially and are overwhelmed with debt, bankruptcy may be an option for you. The bankruptcy attorneys at Hines Law serving the Boston area can help. We specialize in Bankruptcy Law and can help find a solution that works for you. Call us today for a free consultation!