The feeling of being buried under debt as it continues to add interest is one of the most stressful and overwhelming feelings a person can experience. Sometimes, buckling down and adopting frugal spending habits can slowly help you pay back creditors, but other times, the debt is too big of a mountain to climb. In these cases, filing bankruptcy should be considered as an option, but many people don’t have a proper understanding of what declaring bankruptcy really entails.
Here are some of the most common misconceptions about bankruptcy
All debts are cleared forever
While some of your debts will be wiped away, there are exemptions most of the time for things like income tax debts and student loans for both Chapter 7 and Chapter 13 cases. In the case of a Chapter 13, you will have to come up with a 3 – 5-year plan for paying back some or all of your debt.
Bankruptcy means losing all your property
In a Chapter 7 filing, you will have to liquidate many of your non-exempt assets to pay back debts, but there are key exemptions. You won’t be forced to sell the essentials like clothing or some equity in a car. But in a Chapter 13 filing, you won’t have to sell off any assets.
You will get kicked out of your home if you file for bankruptcy
This isn’t necessarily the case. It depends on a number of factors like whether you file for a Chapter 7 or 13, the amount of equity you have in your house, and if you can pay the mortgage after the bankruptcy process is over.
Filing for bankruptcy is a morally wrong thing to do
You might think this if you see declaring bankruptcy as a form of stealing from creditors, or as a way to run away from your mistakes without any consequences. But the reason the state has made bankruptcy legal is because people sometimes need safety nets, so according to the law, you are doing nothing wrong.
The Importance of an Experienced Attorney
You should never file for bankruptcy without first consulting with an expert in bankruptcy law because you could find yourself stuck paying back debts that could have otherwise been discharged. With an experienced legal team guiding you through each step, you will feel so much better about your decision to file for bankruptcy.
At the BCN Law Firm in Clermont, our team knows everything there is to know about bankruptcy law and have handled countless cases. We have the experience and knowledge to confidently put together your application and give you peace of mind in a stressful time.
Contact the Clermont Attorneys at the BCN Law Firm today with any questions you may have.
