Bankruptcy Myths

 Posted on November 30, 2018 in Bankruptcy

Most of the time when you are dealing with legal matters, it is not a simple situation to be in. This is especially true when it comes to bankruptcy. In the United States, there are a handful of different types of bankruptcies that individuals can qualify for, each with their own stipulations and requirements for eligibility. Even beginning the process of determining whether or not you are eligible for bankruptcy can be confusing, especially when there are so many myths and misconceptions surrounding this topic. Here are three of those myths and the actual truth behind them.

Only People Who Are Frivolous with Money File for Bankruptcy

While it makes logical sense, it just is not true. Many people get themselves into debt and file for bankruptcy. Sometimes, people think that those who file for bankruptcy just do not want to pay back their debts, but often, it is the opposite. Many people who end up filing for bankruptcy have explored all of their other options and tried almost everything they could to get out of debt before filing for bankruptcy. Courts will not consider:

All of Your Debt Will Be Wiped Out After a Bankruptcy

Most of your types of debt can be relieved with a Chapter 7 or Chapter 13 bankruptcy, but there are still some kinds of debt that cannot be wiped out when you file. Some types of debt that cannot be relieved include:

• Child support or spousal support obligations;
• Student loan debt;
• Restitution for any crimes you have committed; and
• Tax debts.

A Bankruptcy Will Ruin Your Credit

While you will definitely see a drop in your credit score, it will not last forever. Some credit card and loan companies will not allow you to borrow from them and the ones that do allow you to borrow will typically charge you higher interest rates. Your credit score will likely recover shortly after you file for bankruptcy, but the bankruptcy will stay on your credit report for seven to 10 years.

A New Braunfels Bankruptcy Lawyer Can Help You Get Back on Your Feet

You may think that a bankruptcy will ruin your finances forever, but it will not - it will just take a few years to get you back to where you were pre-bankruptcy. If you think that a bankruptcy is the best option for you to take control of your debt, you need the help and guidance of a Kerrville bankruptcy lawyer. The Law Offices of Chance M. McGee can guide you through the bankruptcy process from start to finish and provide you with the necessary advice and resources that you need to have a successful bankruptcy case. To schedule a consultation, call our office today at 210-342-3400.

Sources:

https://www.nerdwallet.com/blog/finance/5-bankruptcy-myths-dispelled/

https://blog.credit.com/2018/03/7-bankruptcy-myths-debunked-64540/

https://www.creditcards.com/credit-card-news/5-bankruptcy-myths-busted-1282.php