Common myths about the bankruptcy process in Florida
There are many myths surrounding the bankruptcy process that may deter those overwhelmed by debt from beginning the filing process.
Although many people in Florida and throughout the country file for bankruptcy every year, those interested in filing are often hesitant about embarking on the process. To eliminate their doubts, debtors interested in this form of debt relief should familiarize themselves with some of the common myths that surround the Chapter 7 bankruptcy process.
Bankruptcy is only for the financially irresponsible
According to U.S. News, some may believe that only people who are unable to appropriately manage their finances file for bankruptcy. However, there are many different reasons that may force a person to incur a significant amount of debt. Some of these causes include long-term unemployment, the expenses of running a household independently following a divorce and the high cost of medical care.
The bankruptcy process permanently ruins credit
Those who are interested in filing for bankruptcy may believe that the process will permanently ruin their credit. However, U.S. News states that many filers are surprised by how quickly they start receiving credit card offers in the mail again after the process is complete. Those who file for bankruptcy should plan on acquiring a secured credit card at first and then switching over to making timely payments with a standard card.
All debts are discharged during bankruptcy
U.S. News states that many people file for bankruptcy believing that the process will discharge all of their debts. However, not all debts can be removed through this process. For example, domestic support obligations, like alimony, as well as owed restitution for a crime, cannot be discharged.
After deciding to file for bankruptcy, some debtors also spend recklessly because they think that these debts will later be discharged. However, doing this is considered a form of fraud and any debts incurred in this manner cannot be eliminated through bankruptcy.
Preparing to file Chapter 7 bankruptcy
Those who decide to file for Chapter 7 bankruptcy should carefully consider how this process will impact them. According to the Federal Trade Commission, the Chapter 7 bankruptcy process involves the sale of all assets that are considered non-exempt. However, non-exempt assets, like basic household furnishings, vehicles and work-related tools, can be kept.
Even though this process is associated with certain implications, debtors in Florida may benefit from filing for Chapter 7 bankruptcy because it can stop utility shut-offs, wage garnishments, foreclosures and debt collection activities. If you are overwhelmed by debt, speak with an attorney in your area to determine if filing for bankruptcy is the right option for your situation.
Keywords: bankruptcy, Chapter 7, Chapter 13