Filing bankruptcy is a last resort when you are dealing with huge amounts of debt you cannot repay. Still, bankruptcy can also provide you with the clean slate you need, while also giving you a respite from the constant debt collection calls. Before you file, it is important to understand the process, as well as the truth behind the many myths that are out there. Below, our Orlando bankruptcy lawyer busts the biggest myths surrounding bankruptcy, so you are better prepared.
People Who File Bankruptcy are Irresponsible with Money
Perhaps the biggest myth out there is that people who file bankruptcy are financially irresponsible and that they do not know how to manage money. This is not true. Divorce, job loss, and severe illness are the three main reasons people file bankruptcy. In most cases, it has nothing to do with how a person manages their money.
You Can Discharge All Debt in Bankruptcy
The debt you can discharge during bankruptcy depends on two main factors. These are the type of debt you are carrying and the type of bankruptcy you file. A Chapter 7 bankruptcy will allow you to discharge most or all of your debt. A Chapter 13 bankruptcy, however, will reorganize your debt into a payment plan, making it more manageable for you to repay. Still, regardless of the type of bankruptcy you file, certain types of debt such as income tax and child support cannot be discharged.
Married Couples Must File Jointly
Although married couples can file bankruptcy jointly, there is no requirement for them to do so. It makes sense to file jointly when a couple has incurred the debt together. However, if one person has taken on significantly more debt than their partner, it is usually more practical for only one person to file bankruptcy.
It is Okay to Make Big Purchases Prior to Filing
If you qualify for and fileChapter 7 bankruptcy, you can have most or all of your debts discharged, meaning you are no longer legally liable for paying them. Due to this, many people think they can make large purchases just before they file, and get them discharged soon after. This is not the case. The courts will likely view this as bankruptcy fraud and will not discharge the debt you just incurred.
Bankruptcy Permanently Ruins Your Credit Score
It is true that bankruptcy will cause your credit score to drop. However, the amount it drops will depend on several factors and it will never be entirely ruined. Also, the impact on your credit score after bankruptcy is temporary. You can start rebuilding it immediately after you file and often, creditors will start offering you credit so you can improve your credit faster.
You Do Not Need to Work with an Orlando Bankruptcy Lawyer
There is no requirement that you must work with an Orlando bankruptcy lawyer when you file, but doing so will give you a much better chance of obtaining a favorable outcome. At The Benenati Law Firm, our seasoned attorneys will answer all of your questions, help you determine which type of bankruptcy is right for you, and help you discharge as much debt as possible. Call us now at (407) 777-7777 or contact us online to speak with one of our knowledgeable attorneys.