We continue to be surprised by the number of people we meet who desperately need debt relief but who refuse to consider filing for bankruptcy protection because of misinformation they have about bankruptcy. Below are some common misconceptions:
I will lose everything
Nope! This is one of the biggest myths surrounding bankruptcy. If you think about it, many businesses file bankruptcy only to emerge and continue without missing a beat. However, consumers think it will be different for them.
Bankruptcy law provides exemptions that protect some of your most valuable assets, including your home, vehicle, retirement, and others. When an exemption is applied to an asset, it removes that asset from being included in your bankruptcy estate. Thus, many debtors obtain a full discharge of their debt while keeping ALL of their assets.
The most important advice is to plan your bankruptcy filing. Don’t rush into it or use a debt relief service based solely on their flashy advertising. A bankruptcy that is filed at the right time and with a strategy in place can produce extremely beneficial results for your finances.
Bankruptcy will ruin my credit forever
Not so. A Chapter 7 or Chapter 13 will appear on your credit report for years, but with each year the negative impact lessens. In fact, if you work hard to rebuild your credit, you will be surprised at how quickly your credit rating can improve. Additionally, if you are already late or delinquent on loan and bill payments, your credit score is already damaged so filing bankruptcy will not have a huge impact.
I’ll lose my house in bankruptcy
An individual that is close to losing their home is just as likely to lose it outside bankruptcy as they are in it. In fact, if you are struggling to pay your mortgage, filing for bankruptcy can help. Due to the vast number of homeowners that are underwater on their home, many debtors are keeping their houses as long as they continue to make their mortgage payments. By filing bankruptcy, you are eliminating are large amount of other debts which helps you afford your mortgage payments.
If you are overwhelmed by debt and you are scared to file for bankruptcy, contact us at Levitt & Slafkes, P.C. by calling 973-323-2953 to schedule a free initial consultation with an attorney. We will review your individual situation and help you understand all of your legal options for obtaining debt relief.