5 Myths About Chapter 7 Bankruptcy

Many people will find themselves in an unfortunate financial situation, but only a fraction of these individuals will consider filing for Chapter 7 bankruptcy in Florida. There are still many myths surrounding bankruptcy, and while we’ve come a long way over the years, there still exists an unnecessary stigma. Lots of people, from various backgrounds and financial situations, could benefit from filing personal bankruptcy, and this can be a valuable tool in moving towards a brighter future. If you are struggling with debts like medical bills, credit card bills, or personal loans, it might be worth taking a moment to reach out to a qualified bankruptcy attorney in Orlando.

When you’re exploring the possibility of filing for a liquidation bankruptcy, don’t fall for these myths:

  1. You will have to give up your home/car

In the vast majority of cases, filing for Chapter 7 will not affect your home or car. Under new laws, you will be able to protect these assets if they are under a certain value, and these limits are quite generous. Your attorney will be able to look at your assets, and find ways to shield them during your filing.

  1. Your credit will never recover

Most people, when considering bankruptcy, fear the consequences to their credit score. However, any reduction in your score is only temporary, and bankruptcy will fall off your report in 7-10 years. You’ll have a chance to show financial responsibility after your bankruptcy, and many lenders will still consider you.

  1. You will lose your retirement fund

Some retirement assets are considered to be exempt, when looking at potential funds to pay off creditors. These include 401(k) and IRA accounts. If you haven’t recently withdrawn any of your retirement money, these funds should be safe in your bankruptcy filing.

  1. Eligibility requirements are strict

More people qualify for Chapter 7 bankruptcy than you may realize, and the process to assess your eligibility is quite simple. You can take an online “means test” for the state of Florida, and if you are in reasonable financial need, you will likely qualify. From there, you may talk to an experienced bankruptcy attorney in Orlando about the specifics of your situation.

  1. All of your debts will be discharged

While the majority of unsecured debts can be liquidated with a Chapter 7 bankruptcy, certain debts like student loans likely will not be affected. Reach out to a lawyer to find out which of your debts can be included in your bankruptcy discharge.

Ready to learn more about Chapter 7 bankruptcy? Get in touch with us at Nater Law today and ask for your free consultation.

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