There are many myths and falsehoods about bankruptcy.
And the elephant, dragon, and peacock in the image are no more genuine than the information. Friends may be misinformed or accurately recollect obsolete bankruptcy information. Half facts, misinformation, and propaganda abound on the internet. Here are some misconceptions regarding bankruptcy. Every single one of them is incorrect.
Myth: There is no longer bankruptcy relief accessible.
Almost all of the bankruptcy relief that was available before the legislation changed in 2005 is still preserved in the current bankruptcy statute. It is a little more complicated and pricey than it was before the “reform,” but it still functions.
Myth: If you are employed, you cannot declare bankruptcy.
The new “means test” is intended to prevent some filers from filing under Chapter 13 if their income is higher than the median income for households of their size in their state of residence. You must HAVE a job in order to finance a Chapter 13 plan.
Myth: It’s impossible to discharge medical debt
This misconception is also sometimes referred to as “you can’t discharge credit card debt in bankruptcy.” This sounds like the law as bill collectors tell it. Credit card debt, personal loans, and other types of unsecured contract debt are almost always still dischargeable in bankruptcy. Read more about the bankruptcy discharge.
An experienced attorney can easily walk you through all these steps without you having to think much. To book an appointment – https://www.recoverylawgroup.com/bankruptcy/
Myth: Chapter 13 plans call for full payback
Plans under Chapter 13 might range from paying general unsecured creditors nothing to paying them 100%, with every possible variation in between. The interplay between your disposable income, the value of your non-exempt assets, and the total amount of priority obligations you have determines how much you must pay in 13 payments. On Chapter 13, more.
Myth: 10 years after bankruptcy, you cannot obtain credit.
Persons who have filed for Chapter 7 bankruptcy receive credit card offers immediately after receiving their discharge; people in Chapter 13 bankruptcy can borrow money during the procedure. Although the rates on this credit are not the finest, credit is still possible. The Fair Credit Publication Act permits the reporting of a bankruptcy filing for a period of ten years, which is likely where the myth’s origins lie. After bankruptcy, credit
Myth: If you file for bankruptcy, you lose everything.
Most personal bankruptcy petitions filed by people are “no asset” cases, in which the debtor retains ownership of all of his assets. This is so that assets that the debtor may keep are protected by exemptions. Pensions are one asset that bankruptcy trustees and creditors simply cannot seize. More info on how exemptions function.
Myth: Bankruptcy is an indication of moral loss.
More than 90% of bankruptcy filings can be linked to situations that are essentially beyond anyone’s control, such as job loss, sickness, or divorce. If the debt seems to be beyond your means of repayment, you may choose to declare bankruptcy if doing so is the best course of action given your financial condition and personal circumstances.
It is important to pay close attention to what property will be handled as property of the bankruptcy estate if just one spouse files. More about bankruptcy and couples.