In most cases, bankruptcy results not only from unmanageable planned and budgeted expenses, but also from unforeseen expenses, such as losses caused by natural disasters and medical emergencies. Typically, bankruptcy results from a large quantity of debt, sudden unemployment, and divorce.
Undoubtedly, you have heard a great deal of contradictory information regarding personal bankruptcy. Let's examine some of the falsehoods and realities.
Some of your creditors will try to convince you of the fallacy that you cannot apply for personal bankruptcy. This is undoubtedly a fallacy and not true. According to modifications made by the U.S. Congress in 2005, any debtor may petition for personal bankruptcy. Personal bankruptcy filings are governed by state laws, which determine whether a person is eligible for a liquidation of assets or debt reorganization bankruptcy.
Another myth is that filing for personal bankruptcy is humiliating. Filing for bankruptcy is not as humiliating or demeaning as being harassed by creditors. In comparison to filing for personal bankruptcy, constant calls from creditors and the possibility of having your wages garnished are stressful and traumatic.
Filing for bankruptcy allows you to start over financially, and you should view it as a sign of your competence rather than a source of humiliation.
A third misconception is that your credit score will forever be low. True, bankruptcy proceedings are reflected on your credit report. When it is completed and discharged, that information is also recorded, erasing your prior credit history.
Another misconception is that a person can only apply for bankruptcy once in their lifetime. This is partially true insofar as an individual who has filed for liquidation of assets bankruptcy cannot register for a similar bankruptcy for eight years. You may, however, petition for a different type of bankruptcy. This issue will be governed by the statutes of the state in which you file.
Again, it is erroneous, but a widely held belief, that personal bankruptcy results in the loss of all assets. The purpose of bankruptcy laws is to allow a debtor to resolve all debts without losing any assets. This information is available from a state-licensed bankruptcy attorney.
Again, the notion that filing for personal bankruptcy is a tiresome and difficult process is erroneous. Personal bankruptcy is open to everyone. Of course, laws can become quite convoluted, and you could undoubtedly benefit from the assistance of an experienced bankruptcy attorney to simplify the process and ensure the accuracy of your filing.
The decision to file for bankruptcy is never simple, and it is made even more challenging by ignorance of the facts. If you are contemplating this option, you should review the above information and consult a qualified bankruptcy attorney in your state.""
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