Bankruptcy has a lot of pros and cons, but if you're in a poor financial situation that you don't have a way out of, you may not have another choice. Bankruptcy has a stigma, but if it's your only option, you need to pay attention to this. There are some myths about bankruptcy that you should be aware of. Read on for some of these misconceptions and explanations of what you need to know before you file your bankruptcy.
1. Bankruptcy Is Simple
Bankruptcy is not as simple as making an appointment with an attorney, paying a few fees, and forgetting all of your debts. You will be given a packet from your bankruptcy attorney that will need to be filled out by you. This packet is going to ask for all of your financial information, including all of your debts and creditor information as well as tax information, bank statements, and monthly budget. This is going to help the attorney and court system see where your money is going each and every month.
2. Bankruptcy Forgives All Debts
Not all of your debts will be forgiven in your bankruptcy. Even with a chapter 7 bankruptcy, your debts will not all be forgiven. Some debts such as student loans cannot be included in a bankruptcy (no matter what you owe). You may have to pay back other loans, such as mortgages or auto loans, or you may be asked to give these back to the financial institution. If you can't afford your mortgage or your car, the bankruptcy trustee is not going to allow you to hold onto these things (as you'll be back in the same position even after filing). You need to know and understand ahead of time that your debts are not all going to be forgiven and you may not be able to keep everything you have.
3. You Get To Keep All Assets
Your assets may need to be sold. Things such as expensive jewelry, collectibles, and automobiles that are worth money may be sold to pay back your debts. If you have anything that is worth something, the bankruptcy trustee may ask that these be sold in an effort to pay down your debts. This may also include retirement accounts that you have.
If you're in debt and struggling to get your head above water with no foreseeable end, then make an appointment with a bankruptcy attorney to discuss your finances and what options you may have. They can also offer you chapter 7 bankruptcy filing assistance if needed.Share