Myths about Bankruptcy | What You Need to Know

Our firm understands the negative stigma around filing for bankruptcy. However, we are here to help debunk some of the most common myths surrounding bankruptcy. Continue reading and reach out to a Newburgh bankruptcy lawyer today to learn more.

What are the most common types of myths about bankruptcy?

  1. Both spouses will need to file for bankruptcy if they are married. This is a typical belief by many, however, this is not true. This is because you and your spouse are not liable for each other’s debts, therefore, both partners do not need to file for bankruptcy.
  2. It is advised that you pay off all your debts before deciding to file for bankruptcy. This is not a feasible option for all cases. If your debts are worth more than half of your annual income and you are unable to pay off those debts within five years, you should consider bankruptcy as your best legal alternative.
  3. Bankruptcy will ruin your credit forever. This is a typical belief that is generally not true. In most instances, you can secure a new line of credit soon after filing for bankruptcy. Additionally, bankruptcy can be removed from your record after a certain number of years. For example, if you qualify to file for either Chapter 7 or Chapter 13 bankruptcy, it will only appear on your credit report for up to ten years.
  4. You might go to jail for filing for bankruptcy. This is a complete falsity. There are several laws in place that permit people to file for bankruptcy. It is critical to note that, thousands of people file for Chapter 13 or Chapter 7 bankruptcy each year.
  5. You will lose everything you own if you file for bankruptcy. This statement is most distant from the truth. In actuality, Chapter 7 bankruptcy completely discharges certain debts, allows you to keep your home and also all additional possessions. When it comes to Chapter 13 bankruptcy, on the other hand, you may keep all your assets, however, their value will get added to your repayment plan.

If you have more questions about bankruptcy or would like to learn more about these myths, do not hesitate to reach out to our firm today. Our legal team is equipped with the knowledge and experience required to ensure that you have the help you need each step of the way. Our firm recognizes that this may be a stressful time in your and your family’s life. Luckily, you are not alone. Contact us today to retain the services of a skilled and dedicated Newburgh bankruptcy lawyer.

CONTACT A BANKRUPTCY LAWYER TO DISCUSS YOUR DEBT OR COLLECTION ISSUE

Michael D. Pinsky, P.C. represents clients in bankruptcy actions and related matters. Please call 845-394-2616 or contact the firm online to schedule a consultation.

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