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Common bankruptcy myths, debunked

If you are considering filing for bankruptcy in Florida, you may have a lot of questions about how the process works, what types of debts you might be able to eliminate and how it might affect your credit, among related concerns. When it comes to bankruptcy, however, there is a lot of misinformation out there, and learning how to separate fact from fiction can help you decide whether filing is the right choice for you. At Kingcade Garcia McMaken, we have a firm understanding of how bankruptcy works, and we have helped countless clients navigate through the process and regain control over their finances.

A common misconception about filing for bankruptcy, per Time, is that there is a certain stigma associated with doing so, or that by doing so, you are admitting to not being able to effectively manage your finances on your own. If you feel this way, remind yourself that bankruptcy exists for a reason, and that many people from all walks of life rely on it at some point. Furthermore, you may count yourself among the large percentage of people who file because of mounting medical bills, which is something you might have little, if any, control over.

Another common bankruptcy myth is that you will lose absolutely everything, should you decide to file. If you file for Chapter 13 bankruptcy, you generally will not lose your assets, although you should expect their value to factor in to the amount you must eventually pay back. Should you file for Chapter 7, you may be able to choose certain assets as exemptions, meaning you will likely be able to keep them.

Many people also mistakenly believe that paying off their debts is a preferred option over filing for bankruptcy. Depending on your situation, however, you may not be able to pay down those debts, which can further prolong your period of financial stress. If you currently put more than half of your income toward debts and expect to still be doing so five years from now, bankruptcy might be a better option in the long run. More about bankruptcy is available on our web page.

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