Debunking Bankruptcy Myths
Myth 1: My credit will be entirely destroyed. This is completely false. Equally detrimental is refusing to pay bills and allowing creditors to take over collection efforts. Bankruptcy could be a preferable option for your long-term financial credit when you reach the point where this was your plan. Chapter 13 bankruptcy allows you to restructure your payment terms. It is intended to position you for long-term success so that you can meet your financial obligations. On a credit report, paying back debts always looks better than not paying at all.
Myth 2: I will loose my entire savings account. Again, this is not precisely the case. If you have a large amount of money stashed in a bank account, anticipate it to be fair game; you should have been using it. However, retirement plans and deferred compensation plans that qualify under ERISA are exempt from the process. The same holds true for state-approved college savings plans for offspring and grandchildren. Not everything will be lost, nor can everything be considered during the process. If you're concerned about your savings accounts, contact a bankruptcy attorney to ask them specific questions.
Myth 3: Bankruptcy will halt the foreclosure process. This fallacy is a slippery slope that can go in either direction. It can delay the foreclosure process, but depending on the circumstances, it may not prevent it. The most effective method for preventing foreclosure is to prevent it from occurring in the first place. If you are facing imminent foreclosure, Chapter 13 could be an excellent option for you. Chapter 13 bankruptcy enables you to negotiate provisions with your creditors that allow you to continue making payments. Reverse foreclosure is still possible during bankruptcy, but the process becomes much more difficult.
If you have concerns regarding bankruptcy myths, you should always consult a professional. Contact a bankruptcy attorney and allow them to respond to your case-specific inquiries.""
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