Bankruptcy myths prevent many debtors from filing

On Behalf of | Oct 21, 2022 | Bankruptcy |

Some Florida residents hesitate to file for bankruptcy for various reasons. Many of their fears are unfounded because of common myths surrounding this legal procedure. Don’t let these myths prevent you from getting the debt relief you need. Bankruptcy filings are common. Here is what you need to know.

Fear prevents debtors from seeking relief

Filing for bankruptcy is not a complicated process, although many people think it is. The federal Bankruptcy Code is straightforward. It’s easy to do on your own, but you should get help, so you don’t miss something essential and delay the process. Neither do you have to file for bankruptcy along with your spouse if you are married. Many times, only one spouse has significant debt. In these cases, it’s preferable to file for bankruptcy as an individual.

When you file for Chapter 7, you won’t lose everything you own. Many filers think their creditors will take all their assets, but that’s not the case. In addition, Chapter 13 will require you to restructure your debt so you can get a new start in life. Neither will your credit remain permanently damaged. While your credit will suffer in the short term, it will rebound quickly if you follow all recommendations from your bankruptcy advisors.

Maximize your chances for debt relief

Once you have decided to file for bankruptcy, don’t make common mistakes like spending wildly immediately before you file. You’ll likely have to repay those funds. Other common bankruptcy mistakes include:

  • Hiding debts and assets
  • Transferring assets to family members
  • Taking out a personal loan
  • Paying past-due bills

The purpose of bankruptcy is to have some of your debt discharged and educate yourself on managing money better. The most typical types of debt relief come from unsecured debt like medical bills, utility bills, credit card charges, and back rent.