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Portland Bankruptcy Myths

Are you uncertain about bankruptcy due to common misconceptions? Don’t let these misconceptions hinder your path to financial freedom. Read our article or consult our law firm to debunk these myths and gain a clear understanding of bankruptcy, empowering you to take control of your financial future.

Myths about Bankruptcy 


Are you drowning in debt and unsure of your options? Bankruptcy may be the right option for you! If you’re hesitant to file for bankruptcy because of conceptions, we have you covered. It’s crucial to separate fact from fiction and understand the truth about bankruptcy. Discover the truth about bankruptcy myths and how an attorney can help you navigate this process successfully.

Bankruptcy Myth #1

Bankruptcy Ruins Your Credit Forever!

Not true, with guidance and work, many people rebuild their credit score to 720 within two years of filing for bankruptcy and federal home loan programs exist so you can buy a home two years after bankruptcy.

Bankruptcy Myth #2

You cannot eliminate credit card debt!

This myth is often promoted by the credit card industry but is simply WRONG.  Credit card and other consumer debts are eliminated every day by the bankruptcy courts.

Bankruptcy Myth #3

You will lose your home if you file for bankruptcy!

Not true, most people don’t lose any of their assets when they file for bankruptcy and there is one type of bankruptcy that allows you to protect all your assets regardless of value. 

Bankruptcy Myth #4

Bankruptcy Eliminates all Debts

This is not true, while bankruptcy relief can eliminate MOST debts, there are some debt obligations that the law generally does not allow you to discharge including child support obligations, spousal support obligations, student loans, most tax obligations, and court-ordered fines.  Notice we said “generally does not allow”!  Like many things in the law, there are exceptions and under the right circumstances even many of these debts can be eliminated, or at least the payment restructured, in bankruptcy.

Bankruptcy Myth #5

Everyone will know if I file for Bankruptcy

This is not true, although the bankruptcy filing is a public record, almost nobody outside a bankruptcy professional knows where to find this information.  Unless someone knows where to find the information and how to make a specific search, they will not learn of your bankruptcy and you are generally NOT required to notify your employer.

Bankruptcy Myth #6

Bankruptcy is an easy way to get rid of debt

This is not true, bankruptcy is a legal process in the federal court system that involves significant paperwork, court appearances and hearings and many potential risks.  Once you file for bankruptcy you CANNOT simply change your mind.  We compare it to jumping off a diving board – you better look for a soft landing because you CANNOT undo the jump!

Bankruptcy Myth #7

 Only financially irresponsible people file for bankruptcy.

This is not true and recent history is a prime example.  You did not create the Covid virus and nobody predicted that would happen.  But it did.  And as a result many thousands of Americans were instantly financially hurt by the economic drop.  Add in the recent rise in interest rates and the inflation that we all feel at the grocery store and gas pump and guess what?  You end up with a lot of financially responsible people who now find themselves in financial trouble and need help to get back on track.

Bankruptcy Myth #8

Bankruptcy is a way to avoid paying people

This is not true, bankruptcy is a federal process that affords relief to people who need it but also balances the needs of creditors to get paid.  There are significant “checks and balances” in the system that you must be aware of before filing or you might step on a landmine.

Bankruptcy Myth #9

Tax debts survive Bankruptcy

This is not true, the bankruptcy code is a federal law just like the tax code.  Congress wrote laws allowing some tax debt to be eliminated by the federal bankruptcy courts.  There are many hoops and lots of exceptions, but with the right guidance and some planning, many people eliminate tax debt every day throughout this country.


Bankruptcy Myth #10

Bankruptcy is the only solution for overwhelming debt

This is not true, bankruptcy is one possible solution and for many it is the “best of bad options.”  But you should explore alternatives such as debt settlement, debt negotiation, or repayment workouts.  If you meet with a bankruptcy professional to discuss your situation, make sure that professional also helps with these alternatives – or you may be railroaded into a bankruptcy that you do not want.


Oregon Bankruptcy Relief

Stop looking back and face a future free of debt




Michael D. O’Brien is the Managing Partner of Michael D. O’Brien & Associates, P.C. and also supervises the Bankruptcy Practice Group. For nearly 28 years, Michael D. O’Brien & Associates, P.C. has helped individuals and families from Portland, Bend, Clackamas, Tigard, and nearby Oregon areas with affordable bankruptcy protection and Asset Protection strategies to solve debt and financial hardships. We are Portland bankruptcy attorneys serving the greater Washington, Multnomah, Clackamas counties. Our Bend, Oregon offices service our friends in Central Oregon.

Each fact pattern is unique, whether you need to file a Chapter 7 to protect against wage garnishment, an asset protection Chapter 13 to stop a foreclosure, or a Chapter 11 to restructure secured debt, our bankruptcy lawyers are here to help. Perhaps your debt problem can be solved through bankruptcy alternatives and our clients appreciate that we do not push for bankruptcy.

Michael O'Brien Bankruptcy Attorney


Did you know?  Two out of the only three nationally-certified consumer bankruptcy attorneys in Oregon are in our bankruptcy firm!

WE ARE AVAILABLE TO HELP YOU 24/7! CALL US! (971) 339-0708




Michael truly made a difference in the temperament of a negotiation, during these uncertain times Michael assisted me in a tight spot.

Billy M

I was able to get an appointment the next day when I first called. Every single person I spoke with went above & beyond to help me and made sure all of my questions were answered. I was not even charged for an appointment as Michael OBrien was able to assist with everything I needed during the case evaluation and was extremely polite & professional. I would highly recommend him and if ever needed, they will be my first & only call. Thank you again!

Zack Moore

Though I’m a new client, our first case evaluation over the phone felt that the lawyer knew his business and I felt that he was there to help me & without a doubt everyone else that is a client. I’d recommend this office to any & all!

Jay Hoak

I was given the direction step-by-step in order to pay off my debt without having worries. I was also given directions for the things I need to get in writing on paper. The professional advice was “get your paperwork trail” after I got off the phone. The name and number were saved to my contacts. Much appreciated, Thank you!


It’s been several days but we still come up short in describing our appreciation for what Mike accomplished on our behalf; not just in providing financial protection and legal relief, but restoration of a degree of faith that the justice system is at least sometimes blind and just. After spending fortunes on many of Portland’s ‘best’ attorneys it’s truly an honor to be represented by someone with Mike’s mastery of competence and experience. Life-saving for us. My wife and I still randomly and almost hourly remind each other ‘We won!’. Mike has our utmost gratitude.


I had the good fortune to have guidance from Michael O’Brien regarding a lawsuit filed against me. It was quite intimidating as I have never experienced anything like that before. The free video he provided as well as the free case evaluation with him answered my questions and educated me fully on the legal procedures, my rights, responsibilities and my options. I became empowered to defend myself and negotiated a settlement without going to Court. Michael treated me so kindly and professionally and did not capitalize on my situation. I can wholeheartedly recommend the services Michael provides so ethically and generously.

Roseann Flores

After listening to, & hiring other attorneys in the Portland, Oregon area, none of whom did my case of settling my mortgage case ANY good after the 2007/2008 crash, I finally was referred to Michael O’Brien. What a Godsend! I simply cannot say enough about him. I found him to be extremely thorough, professional, leaving no stone unturned, and finally my case was settled to my satisfaction. To this day I cannot believe it. You will not find a better, more steadfast attorney than Mike O’Brien. He’s easy to work with, very courteous, kind, informative. My family and I are forever grateful that he stayed the course, and never gave up, ever. As complex as the situation was, he streamlined everything for me and made it seem simple to follow, whereas other attorneys left me feeling emotionally & financially drained, and nothing was accomplished by comparison. It’s like he saw the goal, & that was it. He made me feel like it was subtle teamwork too, which was GOOD. So great getting to know him. HIGHLY Recommend!

Diane C

Michael O’Brien is a true professional probably one of the best attorneys in the state maybe the country, the services I needed wasn’t his specialty but gave me a wonderful referral that has helped me for my needs. I highly recommend him, thanks Michael

K. Shields
portland bankruptcy attorney

Serving clients in Portland, Tigard, Beaverton, Hillsboro, Lake Oswego, Sherwood, West Linn, Oregon City, Gladstone, Milwaukie, Clackamas, and Gresham.

"We are proud to be a debt relief agency with 2 out of the only 3 nationally-certified consumer bankruptcy attorneys in Oregon! We help people get relief through bankruptcy and non-bankruptcy alternatives."

Stop Garnishment and Repossession! Contact Our Portland Bankruptcy Lawyers Today!

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Whether you're dealing with overwhelming debt, stopping foreclosure or repossession proceedings, or looking for a way to protect your assets, our Portland bankruptcy attorneys are here to help you overcome your financial hurdles!

Please be aware that submission of this no-obligation form does not establish an attorney-client relationship. By filling out the form, you agree to receiving emails from our firm regarding your case evaluation and other helpful resources. 

Disclaimer:By submitting this form you consent to our privacy policy. If you prefer contact via text you understand that *regular text message rates may apply. The information presented on this site should not be construed as formal legal advice and your submission of this form does not establish a lawyer/client relationship. We are proud to be a debt relief agency who frequently, but not always, helps people get relief through bankruptcy.

portland bankruptcy attorney logo


Whether you're dealing with overwhelming debt, stopping foreclosure or repossession proceedings, or looking for a way to protect your assets, our Portland bankruptcy attorneys are here to help you overcome your financial hurdles!

Please be aware that submission of this no-obligation form does not establish an attorney-client relationship. By filling out the form, you agree to receiving emails from our firm regarding your case evaluation and other helpful resources. 

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