If you are facing potential bankruptcy and you are trying to determine if it is a good option for you or not, you have likely heard about a lot of different myths about what can happen during the course of the bankruptcy. Some of these myths may even scare you from attempting your filing. While these myths may be scary, they are not always true. These are some of the biggest myths that surround Chapter 13 bankruptcy.
Chapter 13 Myth 1
You Will Lose Everything
Most people think that when they file for bankruptcy, they are essentially giving up all of their assets they have to their name. This includes their home, car, and any other asset that they may have. However, under a Chapter 13 bankruptcy, you will not necessarily forfeit all of your assets. The value of your assets is taken into account when determining your repayment plan.
Chapter 13 Myth 2
All of Your Debt Will Be Gone
While it is true that you will be able to get rid of a lot of your debt in the process, there may still be some debts that remain at the end of your Chapter 13 bankruptcy depending on the types of debt you currently owe. This is because not all debts can be included in a bankruptcy. Some examples of types of debts that cannot typically be included are student loans, tax payments, child support, and other similar types of debts. However, you can often include debts such as credit card debt, medical bills, and personal loans.
Chapter 13 Myth 3
Bankruptcy Will Ruin Your Financial Future
The results of your bankruptcy on your finances and credit score will not last forever. You will see a change in this information once your bankruptcy is completed but this is because a bankruptcy will show up on your credit for the next seven to ten years. This can make getting a loan difficult and may even cause you to pay a higher interest but this not last forever. There are also ways you can rebuild your credit over time after a bankruptcy.
Chapter 13 Myth 4
Bankruptcy Means You Have Failed
Filing for bankruptcy does not mean you have failed. Many otherwise successful people have filed for bankruptcy. Whatever your reason is for needing to file for bankruptcy, it is important to understand that it is a viable tool that you can use to get your finances back on track.
If you want to explore your options and learn more about bankruptcy, be sure to reach out to Morgan & Morgan for a consultation with their bankruptcy lawyers today.