Bankruptcy gets a terrible rap in Florida. Of course, no one wants to be in a financial hardship that forces them to file for bankruptcy, but if you do, it is a powerful tool to get your life back on track, and you end up becoming more financially adept. That said, let us look at some of the common bankruptcy myths that most people tend to believe it’s true.
You will lose everything you own
You won’t lose everything you own; some properties and assets are exempt from the bankruptcy case. For example, the creditors won’t touch the money in your life insurance retirement accounts, according to Employment Retirement Income Security Act (ERISA). Also, you can exempt some of your personal property and assets from the bankruptcy case, like your car, house, household goods, and other items. You may need to work with a good attorney to help you with this.
You will also wipe out your taxes during bankruptcy
You cannot get rid of your taxes when filing for bankruptcy in Florida. Sure, you can have a portion of your taxes wiped out, and you can also clear income taxes that are older than three years, but you must repay sales taxes. Florida laws follow strict criteria for taxes and bankruptcy, so work closely with your lawyer to see what you can and cannot wipe out.
You will hurt your credit score for a decade or so
The truth is, when you are filing for bankruptcy, you already have a bad credit score, or you are getting there. Indeed, bankruptcy will be reported on your credit score, but that doesn’t mean that it will hurt it. Most people actually build better credit after filing because they learn how to handle their finances better.
You only get one shot with bankruptcy in Florida
There is no limit to the number of times you can file for bankruptcy, but there is a limit to how often you will get a discharge, depending on the type of bankruptcy you are filing for. For example, for Chapter 13 bankruptcy, you can get a discharge after every two years and every eight years for Chapter 7.