Facing bankruptcy can be frightening. If you are in financial trouble and you have begun to consider bankruptcy as an option, there are many things you need to know. Getting your information from an experienced bankruptcy expert, like The Port Law Firm in Florida, is vital to your ability to successfully file. There are a lot of myths and misconceptions about bankruptcy, and if you want to make the right decision about your financial future, you should know what is true and what isn’t.
My credit is ruined for the next decade or I will never be granted credit again.
The most common question those considering bankruptcy ask their lawyer is what will happen to their credit after their bankruptcy. It is important to understand that if you are facing bankruptcy, your credit is already in bad shape. A bankruptcy is the quickest way to reestablish credit. If a bankruptcy is granted, it gets rid of debt and enables you to handle credit like your home or car. If you continue to make payments on these bills after filing bankruptcy, you can demonstrate financial stability and will probably be able to obtain credit again in a couple of years.
A bankruptcy will cost me everything I have.
Laws differ from state to state concerning the property you can keep outside of a bankruptcy. Keeping it outside means the property is protected from your creditors. Property covered under this provision often includes your home, life insurance policy, household goods, a vehicle, the wages from the person considered the head of the household and some retirement funds. When property is not exempt from creditors automatically under the law, but the debtor wants to protect it, they should file for Chapter 13 bankruptcy. Chapter 13 bankruptcy allows you to keep the property, as long as you pay the equivalent value to the creditors.
Keep in mind these exceptions do not apply to debts owed on the property. If you are behind in your mortgage payments, you may face foreclosure and the creditor can collect on that debt by taking your home.
Bankruptcy is only for those who intentionally incurred debt.
People incur debt for a variety of reasons. Life is full of unexpected circumstances like job loss, divorce, medical bills, and failed business ventures. Each of these could trigger the need to declare bankruptcy.
If one spouse files for bankruptcy, the other must follow suit.
There is no reason why an individual cannot file for bankruptcy without it affecting his spouse’s credit rating. If your debt is in both of your names, it will be cheaper to file together. However, if the debt is in one name and only one spouse files, it will not affect the credit of the other spouse.
Filing bankruptcy does not help me with unpaid taxes.
If income tax debt is more than three years old, bankruptcy laws may eliminate that debt. An experienced bankruptcy attorney like those at The Port Law Firm will be able to help you determine if you can eliminate your income tax debt.
Someone filing for bankruptcy can pick and choose what debts to get rid of.
Those filing for bankruptcy must list every asset and every debt when they file. If you choose not to do so, your request will not be granted. Even cases where one of your credit cards is current and still in use will need to be reported. Those filing for bankruptcy cannot pick and choose what they would like to pay back. Some debts are not allowed to be repaid under bankruptcy laws. Something called a formal reaffirmation is considered, which returns you to the status you were in prior to filing the bankruptcy. This means if you default on your new payment agreement, you can have a personal lawsuit filed against you by the creditor.
There are a lot of myths concerning bankruptcy. The best thing to do if you are considering a filing is to contact an experienced attorney who will help you determine the best way to handle your financial situation. Instead of assuming information you hear is true, speak with professionals like The Port Law Firm.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
