Bankruptcy is a serious step in anyone’s life and can have serious consequences. However, in many cases, bankruptcy is the only way out for some and can bring about the much-needed change as it helps them get rid of old debts. Understanding how bankruptcy affects you is key when deciding whether to file for bankruptcy with the help of experienced attorneys such as the BK Lawyers.
People often turn to familiar people who have been through the same thing or try to find answers regarding bankruptcy on the internet. And while in some cases this might provide the answers they seek, in others, it may bring a lot of misinformation.
There’s no reason to turn to unreliable sources for advice when in most cases bankruptcy attorneys don’t charge the initial consultation during which they can provide answers to all the questions you may have about the process. Therefore, we recommend consulting an experienced attorney before consulting the internet.
To help you better understand bankruptcy, we are going to debunk some of the most common myths.
You Can’t Travel Overseas after Filing :
Many people believe filing for bankruptcy prevents you from traveling overseas. However, the truth is that a trustee will let you travel overseas as long as you make the required payments and provide the required information. You’ll also need to provide financial information regarding the trip, for example, who’s financing it, where you’re traveling, etc.
Filing for Bankruptcy Costs a Lot :
As we mentioned, the initial bankruptcy consultation is usually free. Reliable sources you can consult about bankruptcy include trustees, insolvency experts, and AFSA.
You’ll Love Everything :
One of the most common myths is that filing for bankruptcy means you’ll lose all your assets in order to pay off your debt. Depending on the debt, you may be allowed to keep a lot of assets including your household items, furniture, and appliances. You may keep a significant portion of your balance to cover the costs of living.
In some cases, you may be allowed to keep your vehicles to a certain value, as well as tools of the trade. However, most people worry about losing their home. And even if your home has to be sold to cover your debts, you may arrange to purchase it from the bankruptcy trustee.
Your Earning Will be Limited :
There are no limits to your earning when you file for bankruptcy. However, if you earn more than a certain level you’ll need to make some contributions every year during the period of bankruptcy.
The Debts you leave off the Bankruptcy Form are Not Included :
When filing for bankruptcy you need to submit a form listing all your assets and debts. This form is called a Statement of Affairs form. Leaving information out of this form is considered an offense for which you may be criminally prosecuted.
While you need to fill out the form as precisely as possible, leaving out a debt unintentionally will not affect whether that debt will be included in the bankruptcy.
You Have to File for Bankruptcy if You Can’t Pay Your Debts :
There are other ways to cover your debts, but in most cases, bankruptcy is the most effective one. Bankruptcy has a minimal impact on your finances if you’re not able to cover your debts through selling assets and earnings. IF you have a higher income or have reasons to avoid bankruptcy (if you’re a CEO) you can refinance your home, arrange a debt agreement or make informal arrangements to cover the debt.
You’ll Never Get a Loan Again :
While your bankruptcy is recorded in the credit report seven years after filing and it’s recorded in the NPII, there are still ways to help people with bankruptcy get back on their feet. Credit providers are willing to assist individuals who filed for bankruptcy to get a loan despite that.
