Handling bankruptcy is difficult than you thought. With so many myths circulating about bankruptcy, it is difficult to sift fact from fiction. Lawyers of Dallas based bankruptcy law firm Recovery Law Group, help bust some of the most common myths associated with bankruptcy.
# Myth 1 – Bankruptcy filing is public knowledge
Though bankruptcy documents are public records, not everyone is aware of them. Unless one specifically searches for these records they cannot be found easily. You need a specific username and password to access the database containing public records of bankruptcy filers. Thus, your neighbors, friends or a relative finding out about this is very slim. Thus, despite the information being public record, accessing federal court records is not easy.
#Myth 2 – Filing for bankruptcy means losing all property
When you file for bankruptcy, federal and state governments provide exemptions to protect some equity in the property. This includes your house, vehicle, personal possessions, etc. However, when you file for Chapter 7 or Chapter 13 bankruptcy, you must be able to pay the mortgage amount. Another option available is for you to reaffirm the mortgage and keep your house. Chapter 13 bankruptcy even allows you to catch up on mortgage arrearage.
#Myth 3 – You need to pay all unsecured debts in case of Chapter 13 bankruptcy
People who earn a monthly income less than the state median can qualify for Chapter 7 bankruptcy. However, if your income is more than the state median, you need to pass a “Means test” to find out if you can file for Chapter 7 or Chapter 13. Similarly, when you file for Chapter 13 bankruptcy, a test is done to determine your disposable income. This is used to pay off your unsecured creditors. depending on your disposable income, you can pay all your unsecured debts, some of them or none.
#Myth 4 – Couples need to file for joint bankruptcy
This is another popular myth. There is no compulsion regarding the joint filing of married couples, though a joint petition saves you on money (attorney fees, court cost, etc.). Hiring a bankruptcy lawyer is advised as they can expertly assess the situation to let you know whether a joint filing would be more beneficial than individual ones. You can call 888-297-6023 to consult with experienced bankruptcy lawyers regarding your debt situation.