Common Bankruptcy Myths
If you are considering the possibility of filing for bankruptcy, it is important to be sure that you have accurate information before you file. There are many myths and misconceptions about bankruptcy in existence, and it can be difficult to know with certainty if you are getting accurate information from friends, family members, or internet searches. Our West Palm Beach bankruptcy attorneys can provide you with clear information about bankruptcy myths and facts. According to the American Bankruptcy Institute (ABI), the following are among the most common bankruptcy myths to know about when you are thinking about bankruptcy.
Myth: Your Credit Will Be Ruined Forever
Truth: Your credit will not be ruined forever, and in fact, you can begin rebuilding your credit immediately after you receive a bankruptcy discharge. Many people avoid bankruptcy because they fear that they will never be able to obtain a mortgage again, or a car loan, but a bankruptcy will only remain on your credit report for 7 to 10 years after your bankruptcy filing, depending upon the type of bankruptcy. In fact, credit scores begin to bounce back within six months or so after your bankruptcy case.
Myth: You Will Lose All Of Your Property
Truth: You will never lose all of your property in a bankruptcy case. In a Chapter 13 or Chapter 11 bankruptcy case, none of your property will be liquidated. Even in a Chapter 7 bankruptcy case, which is a liquidation bankruptcy, you will be able to retain a variety of assets through bankruptcy exemptions.
Myth: You Can Discharge Any Debt
Truth: While many types of debt are dischargeable in bankruptcy, there are certain types of debt that are exceptions. Common types of debt that cannot be discharged in bankruptcy cases include some tax debts and debt owed because of family support.
Myth: Married Couples Have to File for Bankruptcy Together
Truth: Married couples do not need to file for bankruptcy together. If the debt belongs to just one spouse, it is possible for just one spouse to file for bankruptcy.
Myth: You Can Discharge All Debts Incurred Before Your Bankruptcy Filing
Truth: If you spend excessively shortly before your bankruptcy filing, or if you charge what U.S. bankruptcy law describes as luxury goods shortly before you file, you can face allegations of bankruptcy fraud, and that debt will not be dischargeable.
Myth: You Are Only Eligible to File for Bankruptcy Once
Truth: While there are some waiting periods depending upon the type of bankruptcy you are planning to file for, it is important to know that you are not limited to a single bankruptcy filing in your life. Accordingly, you should not wait to file for bankruptcy because you are worried that you will never be able to file again in the future, and you should not avoid the possibility of bankruptcy because you have already filed once in the past.
Contact Our West Palm Beach Bankruptcy Attorneys
If you have questions about filing for bankruptcy, or if you need assistance with your bankruptcy case, an experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller is here to assist you. Do not hesitate to get in touch with our firm to learn more about how we can help.