Chapter 11 and Chapter 14 bankruptcy can be a great tool to help people get out of insurmountable debt. However, there are many misconceptions about bankruptcy that cause people to not use it when it's an option. Here are a few key things to know about bankruptcy that can help you decide if it's the right path forward.
Bankruptcy Doesn't Mean You're Financially Irresponsible
Don't feel like bankruptcy is only for people that are financially irresponsible. It's possible for anyone to reach the point where they need to use bankruptcy, and for the reason to be out of their control. Something as simple as a medical emergency can create a lot of debt that you cannot easily pay back. Bankruptcy exists to give you the fresh start that you need and actually be financially responsible and get back on the right path.
Bankruptcy Will Not Cause You To Lose Everything
Another misconception about using bankruptcy is that it will cause you to lose everything, which includes all of your assets. You may assume that you'll need to give up your car, home, and even personal belongings. Be aware that bankruptcy laws allow for individuals to exempt assets that are essential up to specific limits. This can allow you to have enough money for a car, not give up your personal property, and even maintain a place to live.
Bankruptcy Will Not Ruin Your Credit Indefinitely
It is true that bankruptcy will have an impact on your credit report. However, it will not stay there forever for creditors to view. Bankruptcy will disappear from a credit history after a specific amount of years, which is determined by the type of bankruptcy you use. This means that using a form of bankruptcy that discharges most of your debts without a repayment plan can result in a longer amount of time before the bankruptcy is reported.
Bankruptcy Is A Matter Of Public Record
A concern with using bankruptcy is that it will become part of public records, which is absolutely true. However, this information is not announced to the public where it would be easily accessible. People still need to know how to look up a bankruptcy and specifically look for information about you. You may be surprised that nobody even learns about your bankruptcy and that it will remain relatively private to others. If someone is going to be snoopy and look up information on your bankruptcy, then they likely already have a suspicion in the first place.
For more information, contact a Chapter 13 bankruptcy attorney near you.