If you are struggling with overdue bills and threats of wage garnishment, repossession and other creditor actions, you may have considered filing for bankruptcy. Before making a decision that will affect your financial future, it is important to understand the law and how it applies in your situation. A good place to start is to dispel common misconceptions about bankruptcy. In this blog post we will take on three of the most prevalent bankruptcy myths:
- Bankruptcy will destroy my credit forever: Bankruptcy will have a temporary negative affect on your credit score, but in time you can build it back up again. If you are considering filing for bankruptcy, your credit is likely in peril anyway. For many, the best way to start building good credit again after a debt problem is to wipe the slate clean and file for bankruptcy.
- People who file for bankruptcy are careless: In most cases, people who file for bankruptcy have no choice. Crises such as a job loss or medical emergency force them into debt and they have no choice but to seek debt relief by filing for Chapter 7 or Chapter 13 bankruptcy.
- Bankruptcy discharges all debts: While bankruptcy eliminates many types of debt, some debts are protected from being discharged. Child support and alimony arrears, for instance, cannot be discharged in bankruptcy. Student loan debts can only be discharged in very rare circumstances involving severe disability. Some tax debts are dischargeable, but only if they are old enough.
How can you separate fact from fiction in a matter as complex as bankruptcy law? Before making any important decisions, talk with an experienced bankruptcy attorney who can provide you with true facts and wise advice about your financial future.