They may say money is the root of all evil, but you’ll have a hard time convincing anyone facing bankruptcy. Bankruptcy is a stressful time but can be managed with help from experts familiar with Schaumburg Bankruptcy proceedings. There are many misconceptions about bankruptcy.
Myth #1: Bankruptcy is a Sign of Moral Failure
Many people wrongly assume that anyone filing for bankruptcy cannot manage money, is greedy, lazy or has some other moral defect. This is wrong. Even large multi-national businesses can become bankrupt through no fault of their own. Causes of bankruptcy include divorce, unexpected medical bills or a natural disaster.
Myth #2: Bankruptcy Eliminates Debts
You do not get a clean financial state after declaring bankruptcy. If you are responsible for making child-support payments, alimony payments or must pay restitution as the result of a legal action, you still have to make these payments. In some instances, you have to continue student loan payments. Sometimes you will not have to pay taxes, but that is not for all people or businesses that file for bankruptcy.
Myth #3: Bankruptcy Permanently Ruins Your Credit Rating
Declaring bankruptcy does not ruin your credit score for the rest of your life. Credit card companies like to offer cards to those who declared bankruptcy. Getting a secured credit card and always making payments on time is a good way to reestablish a good credit rating. After a year, drop the secured credit card for a regular credit card. People who have declared bankruptcy can sometimes get a mortgage just two years after declaration.
Myth #4: Bankruptcy Cures All Your Financial Woes
Bankruptcy is not a free or easy procedure. It is only for worst-case scenarios. It is much better to negotiate with creditors rather than just give up and declare bankruptcy. In some cases, such as filing a Chapter 7, you many lose your home. If you do get to keep your home, you are required to still make mortgage payments.
Myth #5: Both Marriage Partners Have to File for Bankruptcy
This is not necessary in some instances, especially if most of the debt is only in one partner’s name or if the couple spends most of the year livingapart.
Contact Ledford & Wu bankruptcy lawyers who can handle all bankruptcy cases in Schaumberg, we fully understand the importance of securing your rights.
