Filing for bankruptcy is never easy; however, believing the common myths about bankruptcy can make this process even tougher. If you have friends who went through the bankruptcy process before, they may give you some advice. But, bankruptcy laws tend to change and what applied to your friends’ case may not apply to yours, depending on the kind of bankruptcy you want to file.
If you are thinking about filing bankruptcy, you must seek legal advice. Thus, you should hire the best bankruptcy attorney Hagerstown, MD. Your attorney will help you get a clear head about the following bankruptcy myths:
Bankruptcy Means You Failed
Studies show that most bankruptcies result from factors a person cannot control like job loss, divorce, and medical debt. A lot of people who file for bankruptcy don’t have to do so since they did not manage their money properly. Even if you are in this situation, this doesn’t mean you are a failure. Indeed, it demonstrates that you learned a lesson and want to correct your problems.
You Will Lose Everything When You File Bankruptcy
Filing Chapter 7 bankruptcy can have you losing some of your property. But, you won’t lose everything you own. Some exemptions are in place for specific possessions up to a particular value. In general, you can exempt a car, house household item, retirement savings, or home equity.
Filing Bankruptcy Will Eliminate All Your Debts
Bankruptcy offers a way to discharge your debt. And when you win your case, you won’t be responsible for paying your debt. A Chapter 7 bankruptcy filing can eliminate the majority of your debt. This type of bankruptcy can get all or most of your credit card debt discharged. But, when you file Chapter 13 bankruptcy, some of your debt may be eliminated; however, you still need to repay most of it.
You Will Lose Credit Eligibility Forever
Did you think that creditors will consider you a high-risk borrower who can’t manage your money because you filed bankruptcy? If so, you should erase this thought. Creditors will still make credit offers to you since they will view you as a lower risk than before the bankruptcy filing. When your case is over, you won’t have as many debt obligations and you can’t file bankruptcy again for a particular period. But, expect them to offer a credit card at a higher interest rate since they know they can sue you when you become delinquent with your debt.