Know the facts about bankruptcy before filing

On Behalf of | Jun 8, 2022 | Bankruptcy

It is no secret that many people both in New Jersey and throughout the country are experiencing financial struggles. You may feel crushed under the weight of overwhelming debt and need relief.

While bankruptcy may have once seemed like an option of last resort, you may now be seriously considering it. You have likely heard many different, and perhaps contradicting, things about bankruptcy. Before deciding if you want to file, it is important to have accurate facts and information.

Your credit will recover

Bankruptcy will not permanently destroy your credit or prevent you from ever borrowing money again. Bankruptcy remains on your credit record for 7 to 10 years, but you can still obtain credit during that time. However, you may only get approved for low limits and be subject to rather unfavorable terms.

If you want to file for bankruptcy, but your spouse doesn’t want to, you may still file. Likewise, you do not have to file just because your spouse does. Many married people believe bankruptcy cannot be filed unless both spouses agree, but this is not true. If the debt is in one spouse’s name only, it makes sense for only that spouse to file.

Some debts you cannot discharge

Contrary to belief, not all debt is discharged in bankruptcy. The following debts are not dischargeable:

  • Child or spousal support arrears
  • Student loan debt
  • Tax debt

You can potentially keep your house

Fear of losing everything is a major reason many people who should probably file for bankruptcy do not. You won’t literally lose the clothes off your back, and there are even many ways to keep your house, if that is one of your bankruptcy goals.

Although there may have been a stigma surrounding bankruptcy in the past, that has long since faded. There are numerous valid reasons people file for bankruptcy today, including medical debt, job loss or any other unexpected event. You are no longer likely to be viewed as financially irresponsible or reckless because you filed for bankruptcy.

Finally, bankruptcy is a relatively simple process. There are requirements and steps to follow, but the process is not overly complex. A bankruptcy attorney can provide advice and guidance through each stage.

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