As your Bankruptcy Attorney in Wentzville, Mo, we understand that bankruptcy is a drastic action but a viable solution for certain financial peril. With all the misinformation out there about bankruptcy, we saw it best to debunk some of them to give you a better understanding of this debt management option. Without further ado, let’s jump in.
· Bankruptcy clears all past debts.
Most people file for bankruptcy, hoping that it is their lifeline and gives them a fresh debt-free start. However, some debts are immune to bankruptcy filings. You will be required by law to pay domestic support obligations, including alimony and child support, medical bills, personal loans, utility bills, back rent, student loans. Well, that’s unless you can prove hardship, and any criminal fines or restitution, which are part of a sentence. Tax debts can sometimes be reduced or eliminated.
· I won’t have to pay back my credit cards.
Failing to pay your credit cards is often referred to as presumptive fraud, particularly when it involves outlandish spending in the hopes that filing for bankruptcy will forgive your debts. However, this is not the case, and you will be expected to pay back your maxed-out credit cards.
· Bankruptcy will mess up your credit irreversibly.
Your bankruptcy status will show up on your credit report for seven to ten years from the date of filing. Despite this, its effect on your credit score lessens with time, and your credit score can even improve afterward. A solution would be to get a secured credit card and pay bills on time to rebuild your credit score.
· Filing for bankruptcy is the end game for debts.
First and foremost, filing for bankruptcy can be a costly endeavor, You will need to go through the credit counseling process and qualify to file for bankruptcy. After qualifying, you will either file Chapter 7 bankruptcy where your debts are dissolved, or Chapter 13 bankruptcy, requiring you to pay back a portion of all your debts.
· You will keep everything.
Your attorney might not be able to help you keep everything and shield all your assets from creditors. However, most of your property will be immune after filing. Under chapter 7, you will be expected to pay back certain debts, and your luxury items will be sold. Usually, any of your assets that are leased, rented, or leveraged heavily will be exempted from getting sold off. The exempt assets will depend on your state, but most of your primary assets will be safe.
Only financially irresponsible people file for bankruptcy.
Bankruptcy is sometimes not the result of financial indiscipline. With high unemployment, exorbitant medical fees, and unforeseen divorce costs, bankruptcy could result from a slow and unhealthy financial status. Sometimes, bankruptcy can arise because of a divorce, severe illness, and job loss. bankruptcy is often dismissed as a financial failure. However, it is offered as a financial remedy for every citizen.
We are here to help
Filing for bankruptcy can be scary, especially with all the misinformation. Our Bankruptcy Attorney in Wentzville, Mo, Charles Huber will help you navigate the world of bankruptcy and offer you informed advice and guide you through the filing process. We will help determine if bankruptcy is your only way out and how to file for bankruptcy the right way.