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4 common bankruptcy myths debunked

On Behalf of | Apr 29, 2018 | Blog

Being in debt is not pleasant, especially if you have suffered through countless sleepless nights because of it. It is not easy trying to figure out which bills you can put off this month so you can pay your mortgage. You might also feel worried about your vehicle being repossessed. Bankruptcy is not suitable for everyone; however, it could be the solution to your financial troubles. 

Whether you plan to file for bankruptcy in Albany on your own or with the help of an attorney, it is important for you to know the truth about some misinformation you might have heard. Take some time to educate yourself about some common myths about the bankruptcy process

1. Everyone will know about me filing for bankruptcy 

Bankruptcy filings are public records. Anyone who has an interest and specific private information about you can look up the details regarding your bankruptcy case. Usually, friends and family members of people who file for bankruptcy do not learn about it until the filers tell them. 

2. My spouse must file, too 

Married couples are eligible for bankruptcy. If one person wants to file for bankruptcy, their spouse does not have to file unless she or he wants to. Joint bankruptcy filings are ideal when both spouses have a substantial amount of joint debt. Single filings are more beneficial for marriages where there is a large amount of individual debt. 

3. Will have to repay all debts 

The chapter of bankruptcy a person qualifies for is dependent on a variety of factors, including an income means test. If your income is low, Chapter 7 might be more beneficial for your circumstances. Chapter 7 allow for the discharge of most debts. However, if your income is above a certain level, you might have enough income to pay off most of your debts with a Chapter 13 bankruptcy repayment plan. 

4. I must wait until all my debts are seriously delinquent to file 

Many people believe that they must wait until their creditors are harassing them to qualify for bankruptcy. You do not have to wait until your financial obligations become seriously delinquent and you receive demand notices from debt collection agencies. The minute you realize that you are going to experience financial hardship, start looking at your options. Bankruptcy should only become an option if you cannot borrow the funds you need to catch up on your financial obligations from friends or relatives and do not have other resources.