Bankruptcy Myths and Misconceptions in Sacramento, CA

Filing for bankruptcy can be one of the most important financial decisions of your life — yet it’s often surrounded by confusion, fear, and misinformation. At Liviakis Law Firm, we help individuals and families across Sacramento County, CA, separate fact from fiction so they can make confident, informed choices about their financial future.

Below, we’ve addressed some of the most common bankruptcy myths and misconceptions we hear from clients every day.

💭 Myth #1: Bankruptcy means you’ll lose everything you own.

✅ Fact: In most cases, there are options to keep your home, car, retirement accounts, and personal belongings. California’s bankruptcy exemption laws allow you options to seek protection of essential assets — including vehicles, furniture, and even home equity — so you can start fresh without losing what matters most.

💭 Myth #2: Filing for bankruptcy will destroy your credit forever.

✅ Fact: Bankruptcy can actually help you rebuild credit faster than you might think.
While your score may dip initially, many clients see improvement within 12–18 months after discharge. Because your debt-to-income ratio improves dramatically, you become more creditworthy over time.

💭 Myth #3: People who file for bankruptcy are irresponsible with money.

✅ Fact: The majority of bankruptcies result from circumstances outside a person’s control.
Job loss, medical emergencies, divorce, or unexpected life changes can create overwhelming debt. Bankruptcy exists to give honest people a legal way to recover and rebuild — not to punish them.

💭 Myth #4: You can only file bankruptcy once in your lifetime.

✅ Fact: You can file again seeking a discharge after a certain time period, depending on the chapter.
Federal law allows individuals to file more than once — for example, Chapter 7 can be filed every 8 years, and Chapter 13 sooner under certain conditions. Our Sacramento bankruptcy lawyer can help determine eligibility and timing.

💭 Myth #5: Bankruptcy wipes out all types of debt.

✅ Fact: Bankruptcy eliminates most unsecured debt, but not everything.
Credit cards, medical bills, and personal loans can often be discharged, but some obligations — like recent taxes, student loans, and child support — generally remain. During your consultation, we’ll review exactly which debts qualify.

💭 Myth #6: I don’t need a lawyer — I can file bankruptcy on my own.

✅ Fact: Filing without an attorney is risky and can lead to costly mistakes.
Bankruptcy law is complex and highly procedural. Simple errors in paperwork or timing can result in case dismissal or loss of property protection. Hiring an experienced Sacramento bankruptcy attorney ensures your case is handled correctly and your rights are protected.

The Truth About Bankruptcy in Sacramento, CA

Bankruptcy is not about failure — it’s about a fresh financial start. At Liviakis Law Firm, we’ve helped countless Sacramento residents overcome financial hardship through Chapter 7 and Chapter 13 bankruptcy. Our goal is to replace fear with understanding and guide you toward long-term financial recovery.

📞 Talk to a Sacramento Bankruptcy Attorney Who Tells You the Truth

If you’re unsure whether bankruptcy is right for you — or you’ve been misled by online myths — we can help. Schedule a confidential phone consultation with Liviakis Law Firm today to get clear, honest answers about your debt relief options.

Let our bankruptcy lawyers help you separate fact from fiction and take the first confident step toward a debt-free future.