Common Myths about Chapter 7 Bankruptcy
For individuals with overwhelming amounts of debt, Chapter 7 bankruptcy is one option for returning to financial stability. Unfortunately, many people have deeply negative perceptions of Chapter 7 bankruptcy. This may be due, in part, to a number of common myths concerning Chapter 7 bankruptcy. The following list provides the facts relating to several of the most commonly held myths about Chapter 7 bankruptcy:
- Myth: If I file for Chapter 7 bankruptcy, I’ll lose all of my property.
- Fact: Chapter 7 bankruptcy does involve asset liquidation in order to satisfy a debtor’s outstanding financial obligations. However, many different types of property, if not all, can be exempted from asset liquidation, including homes and automobiles.
- Myth: If I file for Chapter 7 bankruptcy, my credit score will be permanently damaged.
- Fact: While a bankruptcy filing will have a negative effect on your credit report, by no means does this mean that you’ll never be able to receive credit again. In fact, many people who file for bankruptcy are able to obtain new mortgages or credit cards less than a year after successfully filing for Chapter 7 bankruptcy.
- Myth: I can’t get rid of tax debt in Chapter 7 bankruptcy.
- Fact: While tax debt is exempt from bankruptcy proceedings in most cases, this does not mean that it can never be discharged through Chapter 7 bankruptcy.
- Myth: If I file for bankruptcy, my spouse will have to do so as well.
- Fact: This is entirely untrue. Only those who are looking to have debt in their names discharged must file for bankruptcy. Therefore, if an individual has significant debts to which their partner is unattached, the spouse is under no obligation to file for bankruptcy.
Contact Us
If you or someone you know is considering filing for bankruptcy, an experienced legal professional can help you understand your available options. Contact the Boca Raton Chapter 7 bankruptcy lawyers of Eric N. Klein & Associates, P.A., at 561-353-2800 today to discuss your case with a qualified member of our legal team.
