Like more formidable situations, bankruptcy has earned its reputation based on true facts, and few too many false ornaments. Most of the bad public education has occurred since the current bankruptcy law took effect in 2005. But have no fear, once you know the facts, the bankruptcy is not as terrible as it seems. Here are some common myths about bankruptcy and you need to know before cleaning slate.
Myth # 1: It is difficult to file for bankruptcy.
False. The new bankruptcy laws have drastically reduced the time it takes to be discharged in bankruptcy to an average of nine months. In the current economic climate, it is understandable that people have to declare bankruptcy to start over. A qualified attorney with experience in bankruptcy may make the process as simple and painless possible.
Myth # 2: You will lose everything you own.
Bankruptcy laws vary from state to state, but every state has exemptions that can protect certain assets such as your home, car, qualified retirement plans, household goods and clothing needed.
Myth # 3: You will not receive credit again.
Quite the opposite, actually. Before even reaching the court house, your mailbox can be rich with credit card offers again. The problem is that they will be part of the subprime lenders charging high interest rates. In fact, if you have a credit card with no balance at the time of filing, you may not need to include in its list of creditors, since they do not owe them money. You may even be able to keep the card after bankruptcy is finished.
Myth # 4: If you are married, both spouses must file.
This one is complicated, but not quite true. It is very rare that one spouse to have a significant amount of debt in your name only. If there are debts that a married couple who wants to be discharged in that both are responsible, will be presented together. If only one spouse in bankruptcy, creditors often require full payment of the spouse who does not file.
Myth # 5: You can only file for bankruptcy once.
You bankruptcy more than once, but the new bankruptcy laws extended the amount of time between presentations. Chapter 7 bankruptcy may be filed once every eight years and filing Chapter 13 once every two years. If you wish to submit to both at different times, there is a wait of four years between the two filings.
Myth # 6: Everyone knows that you filed for bankruptcy.
Unless you are a very prominent person or a large corporation and the media communication as a whole, the only people who know about your presentation are its creditors. These days, the amount of the introduction of people is so great that very few publications have the time, space or inclination to run anyone’s name.