Today I want to answer the question is bankruptcy too good to be true? Client’s have asked me this question after I walked them through the process and they see how the bankruptcy process can win of them their crippling and put them on a good sound footing towards financial security. And, it just seems like it’s too good to be true.

Well, the answer to that is, it kind of depends upon your situation. If you have significant equity in your assets, you may have to deal with that and it may be a more expensive process and you could expose those assets to creditors through bankruptcy. In that case, it’s not too good to be true. Another situation may be if you have debts that are not dischargeable because they’re student loans or they’re recent taxes. In that case, it’s not too good to be true because you’re going to have to deal with those debts even after you get through with your bankruptcy case.

But, if you have income that is below the median income for your state, if you have significant credit card debt or medical debt or other debt like that, that can be discharged in bankruptcy, then the bankruptcy process may end up being fairly straight forward and give you a tremendous amount of relief from debts that otherwise would take you years or even decades to resolve if you were making minimum payments on credit cards.

And for those people where certainly your credit may take a hit, but most people do have their credit recover after a couple of years, for those people, it may seem that bankruptcy is too good to be true.