The fact about bankruptcy is that it can help many people. It can change lives for the better. Yet many people continue to believe inaccurate information about the process. Keep reading to find out five common inaccurate myths about bankruptcy and then contact The Law Offices of Paul Y. Lee at 888-748-0025 if you would like to request a free bankruptcy consultation.
- Debtors Lose Everything in Most Bankruptcy Cases Are you surprised to learn that in Chapter 7 bankruptcies, 97% of cases result in no loss from the debtor? Though this is referred to as a liquidation proceeding, the truth is that most individual debtors do not their property liquidated. Why? Because there are exemption laws that can prevent certain aspects from being taken. It’s also true that in most cases, personal property does not have very high sale value and is simply not worth taking.
- The Means Test Keeps People from Filing for Bankruptcy False. It does not bar anyone from filing bankruptcy. The purpose is to ensure that those who have high incomes are able to justify their choice to file Chapter 7 or 13. The means test affects only that – their ability to file for one type of bankruptcy over the other – not their ability to file bankruptcy at all.
- Credit Scores Take Years to Rebound After Bankruptcy The fact is that your credit score will improve right after the bankruptcy is complete. In fact, long-term studies show that bankruptcy boosts scores right after and then steadily increases them. It is true that the fact that you filed will be reported for between seven and ten years, but it will have a smaller and smaller impact on your credit as time goes on.
- You Cannot Get a Loan if You Are in Bankruptcy Nope. There are many stories of debtors going through Chapter 13 being approved for car loans while their cases are ongoing. It’s true that the terms are likely to be less than great but these loans are available.
- Debtors Fit into One Category or Another Every case is different. Whether or not bankruptcy is best for you will not be the same as it is for your neighbor. You could have the same income as one person and the same amount of debt, yet bankruptcy could be the right choice for one of you and not another. Why? Because there are many factors that go into whether or not bankruptcy is right and which type is right.
That is just one of the reasons that it is important to work with an experienced bankruptcy attorney before deciding to move forward. You can reach out to The Law Offices of Paul Y. Lee at 888-748-0025 now to request a free legal consultation and to get started right away.