Common Misconceptions About Bankruptcy
Filing for bankruptcy no longer carries a negative stigma. What some used to think of as a sign of failure is really a sign of freedom … a fresh start … a new beginning. Unfortunately, there are many myths and misconceptions surrounding the bankruptcy process.
Bankruptcy Myths That Just Aren’t True
Let an experienced bankruptcy attorney at Hawley & Associates, LLC, explain your bankruptcy options and dispel the myths.
- It is nearly impossible to file for bankruptcy. This is a myth. In fact, the U.S. Congress has made it easier for consumers to file for bankruptcy protection.
- If I file for bankruptcy, I will lose my house and all my property. This is a myth. While it is possible to lose property while under bankruptcy protection, most debtors retain all of the property they desire.
- If I file for bankruptcy, my credit will be ruined. While it is true that your credit report will indicate that you filed for bankruptcy, that does not necessarily reduce your credit score. In fact, six months after your debts are discharged, many debtors see an increase in their credit scores. This is due to a change in the income-to-debt ratio that results after discharge.
- If I file for bankruptcy, I will not qualify for student loans. This is a myth. Many people who file for bankruptcy protection later complete college using student loans.
- I want to file, but I do not want to put my house or car in bankruptcy. When most people say that something is in bankruptcy, they are referring to how the payments are made. When you file for Chapter 13 bankruptcy, a plan is developed to ensure that your creditors are properly paid. Typically, you (as the debtor) still make direct payments for your home and car. Only the arrearage (the past-due amounts) are included in the payoff plan.
- Student loans and past-due child support payments can be discharged. While it is technically possible to discharge student loans, this is a very difficult process and most people do not qualify. However, child support obligations and most taxes are not dischargeable in bankruptcy.
- I filed for bankruptcy previously, so I cannot file again. While a certain amount of time must pass before you can file for bankruptcy again, you can refile if you meet the requirements. We will review the particulars of your case and determine if another bankruptcy filing is possible.
At Hawley & Associates, LLC, in Prattville, Alabama, we help clients throughout the Middle District of Alabama push the restart button on their financial futures. If you are overwhelmed by debt due to a job loss, health crisis or any other reason, schedule a consultation with our lawyer and find out how we can help you. Call us at 334-595-8114 or send us an email today.
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.