The Top 5 Bankruptcy Myths
By Tracy L. Hirsch
If you’re considering filing for bankruptcy in Louisville, KY, you’ll be happy to know that it can benefit you in multiple ways. In spite of the stigma, bankruptcy can give you hope for a better financial future by wiping your slate clean after you’re discharged from your bankruptcy plan.
Unfortunately, there are a lot of myths surrounding bankruptcy, which keep people from pursuing it, and thus getting the protection that they need. As a Kentucky bankruptcy attorney with 22 years of experience, I want you to know the truth by addressing the most common bankruptcy myths:
Myth #1: If I file for bankruptcy, I will lose my assets, primarily my house and my car.
In every Kentucky bankruptcy petition, you have to give a full disclosure of your assets. However, in most cases, debtors are able to use available exemptions to protect all of their assets.
Additionally, if you’re like most debtors, you may have little to no equity in your home or vehicle, so as long as you continue to make your required monthly payments to their mortgage company and car loan lender, you’ll be able to keep your house and car.
Myth #2: Filing for bankruptcy will permanently ruin my credit.
For most individuals contemplating a bankruptcy in Kentucky, there are collections, lawsuits, or late payments already being reported on their credit report.
Filing a bankruptcy immediately prevents any of these creditors from continuing to report negatively on their report. Once your old debts are removed from your credit report (upon the completion of your bankruptcy plan), you have an opportunity to begin rebuilding your credit right away.
Most people only know about the myths and negative stigmas surrounding bankruptcy. We’re here to set the record straight.
Myth #3: I don’t owe enough money to qualify for bankruptcy.
There are no minimum debt limits in bankruptcy. Each case is looked at individually based on income, expenses, and need. It is important to consult with an attorney from the beginning to see if bankruptcy will benefit your specific situation.
Myth #4: My spouse has great credit, and if I file for bankruptcy, it will negatively affect his or her credit.
When an individual that is married files bankruptcy, their spouse isn’t forced to file with them. It is absolutely possible for one spouse to file, leaving the other spouse’s credit unaffected by the bankruptcy filing.
However, it is important to discuss these situations with a Louisville bankruptcy attorney to ensure that the debts listed in the petition are unique to one spouse, and are not joint debts. If there are numerous joint debts, it could be beneficial to file for bankruptcy jointly.
Myth #5: I will never be able to buy real estate again.
For many individuals considering a Louisville bankruptcy, their credit score is too low to even attempt to qualify for a home loan right now. One way to get on a path to potentially increase their score is to file a bankruptcy petition.
How is that possible? A bankruptcy will help you to qualify for a mortgage once the liability for your debts is relieved at the completion of your case.
This means that after you successfully finish your bankruptcy plan, you no longer have massive amounts of debt, and you can now start to actively rebuild your credit. In turn, mortgage lenders will be more willing to give you a home loan since your financial situation is no longer a liability.
Are you ready to take the next step? Get in touch with me directly so that we can schedule your free consultation. I’m the only bankruptcy attorney in Louisville, KY who provides my personal cell phone number. You can call or text me at (502) 435-2593 or email me at tracy@hirschbklaw.com.
I look forward to helping you get the fresh start that you need!