The Truth Behind 4 Bankruptcy Myths
It’s a major decision to file for bankruptcy, because there are credit and legal ramifications associated with it. Before you decide on moving forward with a bankruptcy filing, be sure to know the truth behind these 4 myths.
Myth 1: Bankruptcy Causes You To Lose Everything
A common misconception is that bankruptcy will force you to sell your assets. This is simply not true. You’ll be able to keep your car, home, and personal property. Local laws may state that you can even retain retirement accounts instead of having to dip into them to pay your debts. Speak with a lawyer about what assets are exempt from bankruptcy for your state. It will give you a clear picture of what you must give up and what you can keep.
Myth 2: Bankruptcy Can Ruin Your Credit Indefinitely
Needing to file for bankruptcy won’t cause your credit to be permanently ruined. Some immediate changes that you’ll notice will come in the credit card offers you …show more content…
This is not true, because you can qualify for bankruptcy even if you never have missed a payment. If you just suffered a financial hardship and know that you are incapable of paying for debts that you have, bankruptcy is something you can apply for based on your income level. Chapter 7 bankruptcy is for people that have low income, and Chapter 13 is for those with a high income.
Myth 4: Only Credit Card Debt Can Be Discharged
While credit card debt is an unsecured debt that is commonly discharged in bankruptcy, it’s not the only kind of debt that is allowed to be discharged. Medical and utility bills both qualify for bankruptcy as well. Be aware that there are some debts that do not qualify, such as child support and student loans.
Have more myths you want clarification on? Speak with a bankruptcy lawyer for
It’s a major decision to file for bankruptcy, because there are credit and legal ramifications associated with it. Before you decide on moving forward with a bankruptcy filing, be sure to know the truth behind these 4 myths.
Myth 1: Bankruptcy Causes You To Lose Everything
A common misconception is that bankruptcy will force you to sell your assets. This is simply not true. You’ll be able to keep your car, home, and personal property. Local laws may state that you can even retain retirement accounts instead of having to dip into them to pay your debts. Speak with a lawyer about what assets are exempt from bankruptcy for your state. It will give you a clear picture of what you must give up and what you can keep.
Myth 2: Bankruptcy Can Ruin Your Credit Indefinitely
Needing to file for bankruptcy won’t cause your credit to be permanently ruined. Some immediate changes that you’ll notice will come in the credit card offers you …show more content…
This is not true, because you can qualify for bankruptcy even if you never have missed a payment. If you just suffered a financial hardship and know that you are incapable of paying for debts that you have, bankruptcy is something you can apply for based on your income level. Chapter 7 bankruptcy is for people that have low income, and Chapter 13 is for those with a high income.
Myth 4: Only Credit Card Debt Can Be Discharged
While credit card debt is an unsecured debt that is commonly discharged in bankruptcy, it’s not the only kind of debt that is allowed to be discharged. Medical and utility bills both qualify for bankruptcy as well. Be aware that there are some debts that do not qualify, such as child support and student loans.
Have more myths you want clarification on? Speak with a bankruptcy lawyer for