There are many myths circulating about bankruptcy, some of which we’ve already discussed in our previous blog posts. We want to dispel these myths, because in many cases, it is in our clients’ best interest to file for bankruptcy. Filing for bankruptcy can be confusing and frustrating, but taking the steps to file for bankruptcy might be the solution to your financial troubles. At Craft Law Offices, our bankruptcy lawyers are ready to help. Contact us today to get started! We can help you decide whether filing for bankruptcy will be the best choice for you. Our offices are located in Greenville, Morehead City, and Rocky Mount, NC.
Hundreds of thousands of Americans file for bankruptcy each year, so bankruptcy is a common procedure. Many parts of the process can be unpleasant and scary, but the general reputation of bankruptcy comes from a lot of embellishments. Here are a few myths about bankruptcy:
- Married couples will both have to file. It’s not unusual for one spouse to have a significant amount of debt solely in their name; if this is the case, then it’s better to file for bankruptcy alone. But if debt is shared between spouses, then both should file.
- If you recklessly spend right before bankruptcy, you won’t have to pay that money back. In Chapter 7 bankruptcy cases, credit card debt is dissolved, so in theory, you should be able to spend whatever you want and all your debts will be removed in court. Right? Nope. Courts have ruled that racking up charges right before a bankruptcy filing is considered fraud. The debt that is incurred from this kind of situation is not discharged.
- People who file for bankruptcy are financially irresponsible. More often than not, bankruptcy is not the result of a personal failing. Sure, there are cases in which a person filing for bankruptcy has not been great with their finances. But the three major causes of bankruptcy are divorce, severe illness, and job loss. These cases don’t reflect character flaws in the people filing for bankruptcy.
- You’ll lose everything during bankruptcy. You won’t lose everything! Most property in a bankruptcy filing is exempt, and debtors typically don’t lose much. Assets considered vary from state to state, but your house, vehicles, and personal belongings like clothes are almost always safe.
- You’ll lose nothing during bankruptcy. Also not true! There’s a myth that attorneys hold more power than they actually have. Attorneys can’t always shield all of your assets, but they’ll do their best to keep you from losing everything you own.
- You can only file for bankruptcy once. Unfortunately, we may all find ourselves in a financial hardship more than once in life. You can file for bankruptcy more than once in case this happens. For Chapter 7 cases, you can file once every eight years, and for Chapter 13, you can file once every two years. That being said, just because you can file for bankruptcy does not mean you should.
Bankruptcy can be confusing, and it can be especially frustrating if you’ve decided to take steps to file bankruptcy. But at Craft Law Offices, our bankruptcy lawyers are ready to help. Contact us today to get started!