It would be fair to say that any element of the financial industry is tricky to digest, but when it comes to bankruptcy it’s a whole different ball game. From your chapter 7 to your chapter 13, it’s an absolute minefield, and this is one of the reasons why Philadelphia bankruptcy attorneys are in such high demand.
Regardless of whether you are based in Philadelphia or somewhere else in the country, the myths are the same though. There are umpteen misconceptions that arise from this field on a constant basis and through the course of this page we will now take a look at three which are the worst common offenders.
Myth #1 – Everything goes
Bankruptcy is never going to be a pleasant experience, let’s not question that for a moment. However, one of the biggest misconceptions associated with it is that everything goes. In other words, you lose your house, car and everything in between.
Fortunately, the above very rarely happens. If one was to take a look at most Chapter 7 cases, it would start to become clear that a lot just don’t tap into your assets. Ultimately, you won’t be forced into forfeiting any possessions. This tends to be because a lot of assets fall under the exempt category, meaning that they are regarded as essential for your day-to-day life and as such are not included in the process. In other cases, creditors just aren’t interested as on most occasions (unless you own some really extravagant personal items) they don’t hold sufficient value.
Myth #2 – All debts are immediately written off
Sure, bankruptcy is quite favorable in the sense that a lot of your debts will be immediately written off (particularly in the case of chapter 7). However, you’ll still find that certain debts are exempt from proceedings, with student loans being one of the best examples.
The law states that you can’t discharge debts that you hold personal responsibility for. This tends to result in things like credit cards and medical bills being discharged.
Myth #3 – Bankruptcy will blight you for the rest of your life
If you only have ten years left to live, you might be right. In most cases, the next seven to ten years are going to be very tricky indeed – at least in regards to finances. For some people, the difference will be minimal. In other words, if you’re not someone who is applying for a mortgage or other types of finance you probably aren’t going to feel the consequences.
However, if you do want to get back on the ladder in the short-term, you might be set for a rude awakening. It’s during this period in which lenders really are on their toes, and your bankruptcy filing stands out in bright red letters. Over time, your score will improve though, and eventually you will be able to reap the same financial benefits as you were before your bankruptcy troubles.