Bankruptcy is still seen as a taboo topic and much of the stigma attached to it is largely due to some of the myths and misconceptions surrounding it. However, in many circumstances, bankruptcy is the one chance those struggling with debt will have to start fresh and repair their financial health. Continue reading to debunk some common myths about bankruptcy.
Debunking the Myths
Bankruptcy can be a helpful tool for those who cannot pay off their debts and wish to wipe the slate clean.
Here are some commonly believed myths we are shedding some light on:
- Myth: Married couples must both file for bankruptcy. Truth: If the debts are in one spouse’s name, it is best for that spouse to file for bankruptcy alone. If the debt is shared and in both spouses’ names, then both will have tile for bankruptcy to prevent creditors from going after the spouse who does not file for bankruptcy. Therefore, spouses do not necessarily have to file for bankruptcy together. It all depends on the details of your situation.
- Myth: Your credit will be permanently ruined. Truth: Bankruptcy is not the end of your credit. Depending on the chapter you file for, it may remain on your credit between 7 to 10 years. During that time, you will have the chance to begin rebuilding and repairing your financial health.
- Myth: All of your debts will be discharged. Truth: Although a Chapter 7 bankruptcy can certainly discharge most unsecured debts, including credit card charges, personal loans, back rent, and medical bills, not all debts are dischargeable. For example, spousal support, child support, and student loan debts are all typically non-dischargeable.
- Myth: You will lose everything when filing for bankruptcy: There is a common misconception that filers will lose everything be thrown out onto the streets. On the contrary, most of your property such as your house, clothes, and vehicles, are likely safe. Unnecessary luxury goods that are paid off, however, may be sold and the proceeds will be used to satisfy the debt.
- Myth: You can only file once. Truth: Although no one wants to have to file for bankruptcy more than once in their lifetime, the fact is that it might happen. A Chapter 7 bankruptcy can be filed once every 8 years and a Chapter 13 bankruptcy can be filed once every two years.
Speak to an Experienced Bankruptcy Attorney Today!
If you cannot pay off your debts and want to get your finances back on track, reach out to the experienced bankruptcy team at the Law Office of Seni Popat, P.C. for the knowledgeable guidance you need to navigate the process of filing for bankruptcy.
Call us today at (718) 340-3385 to request a free consultation with our knowledgeable attorney today!