Bankruptcy is not something most people want to think about. Unfortunately, when situations prevent you from meeting all of your financial obligations, sometimes it is something to consider. It is important to understand that many of the things you hear about bankruptcy are nothing but myths. Separating the truth from rumors before you file for bankruptcy can prevent any major mishaps.
Filing Bankruptcy is Nothing More Than Filling Out Some Paperwork
Bankruptcy is much more than just filling out some forms. A lawyer will help you understand the process. You will need to explain your situation to a judge. It is not a simple jaunt down to the courthouse and signing your name on the dotted line. It is complicated and may end with several visits to the courthouse.
You Will Never Be Allowed to Get Credit Again
While bankruptcy will not help your credit score, you will be able to rebuild credit, often within a year of filing for bankruptcy. And, since your debt will be more manageable, you will be able to rebuild your credit more quickly. Additionally, many companies have special rules about extending credit to people who filed for bankruptcy.
Only the Financially Irresponsible File Bankruptcy and Everyone Will View You This Way
There are many setbacks people go through that lead to financial stresses, which in turn leads them to file bankruptcy. These setbacks include things like divorce, unemployment, and added household expenses and are not a reflection on how responsible or irresponsible you are with your finances.
All of Your Debts will go Away When You File Bankruptcy
While many debts can be discharged, debts such as school loans are rarely forgiven as part of the bankruptcy process. Ongoing payments such as alimony and child support will probably not be discharged since they are ordered by the court.
You Can File as Many Times as You Want
There has been a new law enacted in recent years that apply strict limits to how often you can file for bankruptcy. For instance, you cannot file for Chapter 7 bankruptcy if you have filed for a Chapter 7 bankruptcy in the last eight years.
Bankruptcy can seem like it is the end of the world. It can seem like it is quitting and giving up. Navigating through the process can be even more discouraging. Plus, you have the added 'bonus" of all bankruptcy myths leading you in the wrong direction. It is vital for you to understand bankruptcy and everything it can do for you before filing. Contact a bankruptcy attorney such as Thomas A Blake for professional advice before going through this process.
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