Many people are under the impression that filing for bankruptcy can cause them to lose their homes and cars. These individuals may already be drowning in debt and struggling to make payments to keep their homes out of foreclosure and their vehicles out of repo status. Bankruptcy can help those who are having trouble with debt to overcome their financial issues and save their property, in some cases.
Learn about some common bankruptcy myths that prevent people from filing and getting the help they need.
It will ruin your credit
Bankruptcy will have an impact on credit scores. The impact is usually not as adverse as maintaining a history of late and delinquent payments and collection judgments, however. People who have fallen behind on their payments by several months already have extremely low credit scores. Filers should keep in mind that bankruptcy often shows on their credit profiles for up to 10 years. In many cases, though, credit scores improve after bankruptcy because the debts have been discharged or repayed.
You will lose all of your possessions
Some people qualify for exemptions that enable them to keep their cars, houses and other property and assets. 13. People who are file bankruptcy should be aware that they may not be able to keep everything, however. What happens to their possessions in bankruptcy is dependent on their specific situations and the chapter of bankruptcy they file
You are not eligible
There are strict laws governing Chapter 7 and Chapter 13 bankruptcies. There are also income limits and a means test filers must meet to qualify for bankruptcy. Many factors can affect people's ability to repay their debts. Some people have a lot of delinquent medical debt that makes it hard for them to have enough income to support themselves and their families. Others have huge credit card debts that make it challenging for them to manage their everyday expenses. The courts take these things into consideration when assessing bankruptcy eligibility.
Bankruptcy is a good solution for many people who cannot resolve their debts any other way. It can put an end to creditor harassment, collection calls and demands for payment. It can also reduce the amount of stress and pressure people are facing . Those who are worried about debts they cannot afford to pay should speak to an attorney to learn about their options.