Bankruptcy Myths

There are so many bankruptcy myths that exist that it can be difficult to tell fact from fiction. In fact, these myths can have an impact on a person’s decision to file, despite what their financial situation tells them they need to do.

If you have tried everything to solve your debt situation, it is best to get the facts about filing bankruptcy and your Minneapolis bankruptcy lawyer can help you know these facts. This is a much better alternative to listening to what those within the community may have to say, especially if they were never given the facts or they assume just based upon what they have heard. It is also good to know what some of the most common myths are so you are not deterred from having a very important conversation with your attorney.

Here are some of the common bankruptcy myths:

  • You have to be unemployed to file bankruptcy: You are allowed to have an income as long as that income isn’t enough to pay back your debt.
  • Medical bills cannot be discharged: Medical bills are actually one of the most common debts that are discharged.
  • You do not qualify for bankruptcy: You may not qualify for Chapter 7 if you have even the slightest amount of disposable income to apply toward your bills, but you can file Chapter 13.
  • Chapter 13 requires full repayment of debts: When you are approved for a Chapter 13 repayment plan, some creditors may receive nothing while others receive 100%. These plans are comprised of you paying back a percentage of debt rather than all of it. Your financial situation determines the amount that is repaid.
  • You lose all of your assets: Most bankruptcy cases are “no asset” cases. This means the debtor is able to keep everything they own. This is due to Minnesota exemptions at the state and federal levels.
  • You cannot obtain credit for 10 years: This is far from the truth because there are individuals who file Chapter 13 bankruptcy that are able to borrow money during the case. Once a person has a Chapter 7 bankruptcy discharged, they are bombarded with credit card offers. This myth’s roots lie in the fact that the bankruptcy must be reported on your credit report for 10 years.

The best thing to do if someone other than an attorney tells you things about bankruptcy is check with an attorney. You can ask any questions that you may have and receive truthful answers. This will help you make the right decision when it comes to using bankruptcy as a way to find the freedom from debt that you need. The moment you file, creditors have to stop harassing you, foreclosure proceedings have to stop, and so do liens and lawsuits. Even wage garnishment cannot continue.

Don’t let the bankruptcy myths keep you from doing what you have to do to get your finances under control. To learn the truth about filing bankruptcy, you need to speak with a qualified attorney who can give you all of the information you need to make an informed decision. To get started, call for a free consultation at 952-448-3333.