Myths On Bankruptcy Exposed - new
Taking Down The Myths Surrounding Bankruptcy
Most people have a general idea of bankruptcy as a way to discharge all outstanding debts and obtain a second chance at stabilizing a good financial record. As with any widely discussed topics, there stand myths and factual data regarding the process and consequences of filing for bankruptcy.
No. 1 Filing For Bankruptcy Doesn’t Stop The Harassing Phone Calls From Creditor Companies
This statement provides a false notion of the process of filing for bankruptcy. Bankruptcy laws provision for creditors to immediately stop all letters or phone calls during the time an individual files for bankruptcy. The lending company or crediting company faces legal action, if they do not adhere to these laws regarding consumer related bankruptcy cases. The court will assess punitive damages to any company in violation of the laws set out to protect the consumer in the event of filing for bankruptcy. Attorneys at law have the ultimate say in interactions with lenders and creditors during the bankruptcy filing procedure. Remember, in the process of filing for bankruptcy all creditors and lenders will have to stop the phone calls and communication attempts to collect debt or they will have to answer to court action.
No. 2 Filing For Bankruptcy May Send My Family Relationships Into Chaos and May Lead to Divorce
These assumptions present false logic on the basis of filing for bankruptcy. A consumer has two choices when filing for bankruptcy, either they file voluntary suits or the lenders act against the individual and file for involuntary bankruptcy proceedings. Consumers must consult a bankruptcy attorney in the process of filing a bankruptcy petition for voluntary cases. Voluntary bankruptcy comes from discussions through the best course of action for the individual or family in their current financial situation. Divorce usually causes the process of filing for involuntary bankruptcy cases. Consumers exercise their right of free choice in the act of filing for voluntary bankruptcy.
No. 3 The Court Repossesses All of My Personal Assets To Pay Down Outstanding Debt
The court will appoint a trustee to preside over which personal assets may be seized in order to pay of some outstanding debts but they won’t have access to all of your personal assets. Filing certain types of bankruptcies immediately restricts the repossession of certain personal assets. Chapter 13 bankruptcies involve the least amount of repossession inducted by the courts to pay off outstanding debt. Instead, repayment terms become court mandated for paying down outstanding debt the consumer accumulated. Chapter 7 bankruptcies involves the most repossession of certain personal assets in order to discharge outstanding debt but even in this case not all assets fall under provisions for seizure. Most consumers will be able to keep their personal assets outside of vehicles, homes, certain furniture, bonds or life insurance policies purchased on a line of credit. Your attorney provides the best source of information with regards to which personal assets are and are not exempt.
No. 4 You Cannot File For Bankruptcy More Than Once In Your Lifetime, You Get One Shot
While it’s not advised to file for bankruptcy in the first place or for the second time, consumers do have an option for filing for bankruptcy again in the same lifetime. Certain guidelines, rules and restriction apply to the amount of time needed between filing for bankruptcy, including time it takes for the bankruptcy to discharge.
No. 5 My Credit Life Will Be Over After Filing For Bankruptcy
No one would ever file for bankruptcy, if they could not obtain any lines of credit after the fact. American society depends on the use of credit in order to acquire some of life’s necessities. Most consumers get a second chance to rebuild their credit immediately after discharging a bankruptcy. Secured lines of credit offer the consumer a chance to prove they’re financially responsible even after filing for bankruptcy. Working on rebuilding your credit could have you approved for a home mortgage in just a few years after your bankruptcy discharges. Sometimes with the same interest rates acquired by those with great credit histories.
Tag: Myths on bankruptcy
September 18th, 2007 at 2:00 pm
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