Myths and Misconceptions in BankruptcyFiling for bankruptcy has many benefits in the context of resolving financial problems, as well as some disadvantages. Unfortunately, there are a broad variety of common myths and misconceptions in bankruptcy that cause some people to shy away from even considering it as an option.
The Liviakis Law Firm has been working with individuals and families to resolve debt problems since 2008 and has the ability to address assumptions, concerns and questions. To dispel false or inaccurate information about filing for bankruptcy, contact me today for a free initial consultation.
Common Myths and Misconceptions About Filing for BankruptcyAmong the most common myths and misconceptions about what happens when you file for bankruptcy is that you will be forced to give up your home, your car and all of your other possessions. Another is that your credit score will be so horrible that you will not be able to qualify for any kind of loan for several years after you file. You have also probably heard that student loan debt is not dischargeable in bankruptcy, so if that is your primary source of debt, filing for bankruptcy isn’t worth it.
In contrast, the reality is that many of your possessions, including your primary residence, some other assets, alimony payments and your salary, are usually exempt from liquidation in Chapter 7 bankruptcy.
Moreover, student loan debt is dischargeable in cases of specific undue hardship, and may be included in a Chapter 13 repayment plan (with the full balance to be repaid at the end of the repayment term of three to five years). Another myth related to Chapter 13 bankruptcy, that the full balance of your debts must be included in the reorganization of debt, is untrue as well. In many cases, only a small fraction is repaid. In some, the balance is written off completely
It is true that bankruptcy is reported to credit bureaus and remains on your credit report for seven years. However, your credit score is likely to improve over the course of the two years immediately following a bankruptcy filing due to the elimination of debt balances.
Debt Relief Guidance From a Sacramento, California, AttorneyI represent clients in communities throughout Sacramento County, El Dorado County and Placer County, California. For your convenience, I have offices in Ranch Cordova and Sacramento
An experienced bankruptcy lawyer can help you to fully understand the options available to you. Having the correct information about the bankruptcy process will help you to make the best decision to meet your financial needs. To get on the right track, contact our office for a free initial consultation.