Bankruptcy is one of those taboo topics that many people would rather not discuss. Those who are unaware of the specifics of bankruptcy tend to make assumptions to compensate for their lack of knowledge. The overwhelming amount of inaccurate information in circulation has led people to believe that filing for bankruptcy is a weak move pursued only by those who go broke. In all actuality, filing for bankruptcy can be the smartest decision as it can help restructure your debt or even eliminate debts. The first step in changing the perception of bankruptcy is to dispel the most common bankruptcy myths.
Myth #1: You Will Lose Your Home & Car
One of the most prevailing bankruptcy myths is that filing equates to losing your car and home. The truth is that home foreclosure and vehicle repossession is not a guarantee when filing for bankruptcy. You have the ability to reaffirm debts during the bankruptcy process. Reaffirmation means that you acknowledge your debts and agree to make on-time payments. Although you do have the option of keeping your home and car, speak with an experienced bankruptcy attorney to be sure that it is best for your specific case.
Myth #2: The Chapter 7 “Means Test” Disqualifies Most People
The idea of having to undergo any form of testing can frighten anyone as there is a possibility they will not “pass.” Such fears cause people to conclude that the Chapter 7 bankruptcy means test disqualifies most pursuants. The means test is simply in place to affirm that the individual attempting to file Chapter 7 bankruptcy truly cannot afford to pay their debts. The only people who “fail” the means test are those who earn enough to pay off their debts. Chapter 13 bankruptcy is a better option for those individuals.
Myth #3: You Can Never Get Credit Again
The majority of people can start applying for credit two years after filing for bankruptcy. You can expect higher interest rates as you are now considered to be a high-risk customer, but the opportunity allows you to rebuild your credit. As you clear most of your debt over time, creditors gain trust in your ability to make on-time payments and eventually lower your interest rates.
Don’t Let Bankruptcy Myths Take Away Your Chance for a Fresh Start!
Do not allow bankruptcy myths to stand in the way of you making a necessary financial decision. E. Orum Young Law Offices has over 35 years of experience and has filed the most bankruptcies in Northeast Louisiana. We house experienced bankruptcy attorneys who can assess your current financial state and determine whether Chapter 7 or Chapter 13 bankruptcy is most suitable for your particular case. Call (318) 599-0601 today for a free consultation.