Some things in life come as a total shock and often leave people grappling for breath. Financial blowouts and bankruptcy are two such events that no one wants to experience. However, much like a car accident, you sometimes have no choice but to declare bankruptcy to give you a breather from creditors.
Consult with legal professionals in a language that you are most comfortable with to understand the nuances well. Nothing is worse than legal language being lost in translation! For example, if you speak Spanish, look for a skilled bankruptcy attorney who speaks Spanish and can explain the exact procedure and benefits.
Read on to bust five myths about bankruptcy that you should stop believing in right away! Happy reading!
5 Things Financial Institutes Don’t Want You to Know About Bankruptcy
#1 Bankruptcy Doesn’t Ruin Your Credit Forever!
No one wants a bad credit history. After all, it is one of the most important things that creditors check before giving a loan. Since most people don’t have a clear understanding of the ramifications of bankruptcy, they assume that once you file for it, there’s really no going back.
But this can’t be farther from reality. In fact, if you are already neck-deep in credit payments, mortgage, lawsuits, etc., your credit score is bad. Filing for bankruptcy allows you to clear your slate and start a new record.
#2 Bankruptcy Doesn’t Mean You Will Lose EVERYTHING You own!
If you live in Florida and are filing for bankruptcy under Chapter 7 (non-asset cases), you have really nothing to worry about. Thanks to Florida’s generous exemptions, most people don’t have to turn over invaluable assets like houses, savings, pensions to trustees.
#3 Paying Debt is Not Always the Best Thing (if you don’t have the means to pay)
Of course, financial institutes and credit companies don’t want you to believe that you have another option. If you’re struggling financially but continue to pay consumer debts like medical bills, credit card payments, you will eventually have no money left!
So, if you think that you’ll not be able to clear off your debts in the coming five years (when the debt value is more than 50% of your income), the best chance you have is to file for bankruptcy.
#4 Not Everyone Knows You are Bankrupt (unless you are a celebrity)
Many people shy away from filing for bankruptcy because they think everyone will find it out. Unless you are a big shot or you informed someone yourself, there is practically zero chance that anyone other than your creditors will find out about it.
#5 Bankruptcy Filing is not Rocket Science!
If you have the right legal support, the process of filing for bankruptcy is pretty simple. A skilled professional can increase your chances of winning substantially.
Summing Up While you should consider bankruptcy as a last resort, it simply doesn’t make sense to put it off just because of popular misconceptions. Here’s hoping this blog helped you get some clarity on bankruptcy laws in Florida.