We have all been in situations where we lose control of our finances and the future is uncertain. With looming credit card bills, medical bills, and past due notices piling up, what do you do? Trying to manage debt alone is challenging and oftentimes risky. Your credit score is falling rapidly, creditors are calling constantly, and there doesn’t seem to be a way out. Filing bankruptcy may seem like the only option in this situation. There is a lot of information out there regarding bankruptcy and also a lot of myths and misconceptions about bankruptcy and how it affects you. When you are considering filing bankruptcy, consult with a bankruptcy lawyer and find out the best option for you. Read through these common myths to give you a better understanding of the impacts of filing bankruptcy.
You Can Only File Bankruptcy Once
If you are under the impression that filing bankruptcy is a one-time deal, then you can finally let go of that breath you have been holding. Give yourself a break and realize that filing bankruptcy can be done more than once, but there are limitations. Under Chapter 7, in which your assets are liquidated, you can file bankruptcy once every eight years. If you file under Chapter 13, in which you pay back debt with a payment plan, once every two years. If you have filed a Chapter 7, you must wait six years until you can file a Chapter 13. In addition, if you file a Chapter 13, four years must pass before you are able to file a Chapter 7.
Bankruptcy Can Affect Your Spouse
Money is often a struggle that couples go through together and when one is filing bankruptcy, it will affect the other emotionally, but given the circumstance, it does not affect their finances. Filing bankruptcy will affect both individual’s credit if the debt is under both names. In this case, filing bankruptcy should be done together. Otherwise, creditors will look to the non-filing couple for payment of the entire amount.
You Can Go To Jail For Unpaid Debt
This is an especially scary myth. The thought of being sent to jail and being all the more unable to pay off debt is often a scare tactic used by debt collectors. However, you will not be sent to jail for owing money. What can be done are also intimidating prospects, such as being taken to court, garnishment of wages, or hold your property until the debt is paid off. Instances where you can be sent to jail is when a crime is committed, such as hiding property, committing fraud, or refusing to pay taxes.
Bankruptcy Is Expensive
Filing bankruptcy itself is not expensive depending on which chapter you file under. Costs can add up when hiring a bankruptcy attorney, but the alternatives could be much more expensive. Interest and penalties that accrue over time are often more expensive than hiring a bankruptcy lawyer. It is possible to file bankruptcy on your own; however, this can be equally as dangerous given the complicated bankruptcy laws.
When To Consider Filing Bankruptcy
When you have explored all of your options and have consulted with a bankruptcy attorney, reasons to consider bankruptcy are:
- You have been unemployed for a long period of time and have no income or savings.
- There is a significant amount of back taxes.
- If your home is nearing foreclosure.
- If you have employment, but wages are being garnished.
- There are potential lawsuits for unpaid debts.
Given your specific situation, bankruptcy may be your best option. Consulting with a bankruptcy attorney will give you a better shot at having a positive financial future. Contact the bankruptcy lawyers at TATE BYWATER to find out the best option for your financial situation and finally take control of your debt.