The majority of Americans hesitate when someone mentions bankruptcy as a way to relive their debt and get out from underwater. Fears of losing everything, having no credit, and being marked as a failure prevent many individuals from filing bankruptcy. Yet many of these ideas regarding bankruptcy are not true—and are merely myths that have yet to be uncovered.
COMMON MYTHS ABOUT BANKRUPTCY
Myth #1: You will Lose Everything: You will not lose everything when you file for bankruptcy. Each state has exemptions that allow individuals certain assets. This can include a home, a car, and even furniture. Your bankruptcy lawyer can help you review the exemption guidelines and determine which of your assets would be exempt and which would be subject to bankruptcy.
Myth #2: You Must File with Your Spouse: It is possible to file independently from your spouse and you can choose the method of filing that is best for you and your financial situation. There may be benefits to filing jointly, but your bankruptcy attorney can help you choose the best bankruptcy path.
Myth #3: Your Credit Rating will Tumble: While your credit rating will take a hit when you file for bankruptcy, individuals are often able to restore their credit ratings faster when they are unencumbered by debt. Credit scores fall drastically when you are late with your payments and underwater with debt too. Bankruptcy will affect your credit scores, but it will also alleviate your debt and allow you to begin fresh again.
Myth #4: All Your Debt will Disappear: This is not necessarily true. Many types of debt are not allowed to be discharged, including student loans, alimony, and child support. Your bankruptcy lawyer will, however, work with debtors to reduce payments and make it more manageable for you to meet your financial obligations.
Myth #5: Bankruptcy Means I've Failed: This is the biggest myth there is. There are many reasons why someone could find himself or herself in financial difficulty. Yet through bankruptcy, these individuals and families can wipe the slate clean and start again, unencumbered by past debt. Bankruptcy allows families the chance to begin down a different path and make the life they envisioned for themselves, a reality.
CONTACT BOULDER BANKRUPTCY ATTORNEYS
Bankruptcy attorneys at Goff & Goff can help you avoid financial ruin and eliminate the stress of large debt. Through Chapter 7 bankruptcy you can regain the financial independence that you've lost, and move towards the future unencumbered by your debt.