Common Bankruptcy Misconceptions: The Truth About Filing

Last updated on September 29, 2026

At William H. Lively, Jr. WHL, PLLC, in Tyler, we are here to help people just like you find a way out of debt. We understand that you may be unsure about filing for bankruptcy, but it is often a good solution for individuals and families. Whether you are trying to manage your East Texas family’s finances or you are out of work, bankruptcy may be right for you.

We treat clients like family, and there is no judgment here. Our bankruptcy lawyer, William H. Lively Jr., offers a free consultation to discuss your specific situation so you can decide whether you want to file. Just call us in Smith County at 903-920-0008 today to get started.

Bankruptcy Myth 1: I Will Lose Everything I Own

Losing all of your property and belongings is the fear most people have, but Texans benefit from generous state exemptions. For example, there is an exemption for your primary residence, as long as you have owned it for at least 1,215 days prior to filing.

Additionally, you receive exemptions for your vehicles (one vehicle for every licensed driver in the household).

A single person also receives $25,000 for personal property exemptions, while the exemption is $50,000 for families.

These are just some of the exemptions available. We can explain how all of them work.

Myth 2: Only Irresponsible People File For Bankruptcy

This is an unfortunate misconception that keeps some people from addressing their debt. The reality is that there are many very real reasons that people file, including:

• Medical debt from an unexpected illness or injury
• Layoffs, including those in the oil and gas industry
• Divorce and other significant life events
• Student loans that create debt
• A mortgage that has become unaffordable
• Relying on credit cards for household expenses

There is no reason to feel bad about bankruptcy. It exists for a legitimate purpose and is even part of the U.S. Constitution.

Myth 3: My Credit Will Be Ruined Forever

The good news is that bankruptcy does just the opposite. Taking steps to get rid of your debt can actually help rebuild your credit. While bankruptcy temporarily lowers your credit score, the process of eliminating your debt begins to help your credit improve.

See our page on rebuilding credit after bankruptcy for more information.

Is Bankruptcy Weighing On Your Mind? Let Us Help.

Attorney Lively can show you how bankruptcy can lift the burden you’re carrying. You get a free consultation so he can answer questions and assess your needs. Please call us at 903-920-0008 or contact us online today.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.