Bankruptcy is a topic you hear a lot about, but do you know fact from fiction? This blog and tomorrow’s blog will discuss some of the common misunderstandings surrounding personal bankruptcies:
•If I file bankruptcy, I'll lose everything I own. Losing assets is one of the biggest fears people have about filing bankruptcy. While it is possible, it is unlikely. The law provides numerous exemptions that protect a wide variety of assets including, but not limited to, your home, vehicle, household items, and retirement funds. In fact, in many cases the debtor actually keeps everything he/she owns!
•I'll never be able to get credit again.You may be worried that filing bankruptcy will forever ruin your credit score. While bankruptcy negatively impacts your credit score, it doesn’t ruin it. You can emerge from bankruptcy with a fresh financial start. With time, patience, and hard work, you can rebuild your credit. In fact, most often, a debtor’s 15 month out of bankruptcy credit score will be higher than it was on the day the bankruptcy was filed. The reason is because many of the items that were on the credit report pre-filing will be removed after the discharge is entered. Also, since another bankruptcy can’t be filed for a long period of time, a debtor emerging from bankruptcy is actually a good credit risk for a lender.
• I can max out my credit cards since the debt will be discharged anyway. Although most credit card debt is eliminated in bankruptcy, there are some exceptions. One of them is credit card purchases that are made within 90 days of filing bankruptcy. Such charges are typically non-dischargeable.
Be sure to read our blog tomorrow to learn more truths about bankruptcy.
Please keep in mind that every case is different. If you are interested in filing a personal bankruptcy and you would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at (954) 932-5377.