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Bankruptcy myths revealed

| Oct 30, 2017 | Bankruptcy Reform

When facing financial troubles, many people look to bankruptcy. This is a complicated legal process that can often be confusing. People may have many ideas about filing bankruptcy in Florida that simply are not true. These myths seem to be quite persistent, and if people are to get the most benefit from the process, they need to separate the facts from the myths.

Time notes many people believe that paying off their debts is a much better alternative to bankruptcy in every situation. However, this is not true. There are many situations where paying off the debts could do more harm than good. Some people may try to pay off debts because they fear they will lose everything if they file. This is another myth. You are allowed to keep most personal items and many other large items under exemption laws. In addition, usually only things that can be sold off for a profit will be taken so they can be used to pay back creditors.

On the other side of the issue, some people want to file bankruptcy because they believe it will wipe out every debt they have and give them a clean slate. Again, this is not true. Student loans, child support obligations and court orders typically are not discharged in a bankruptcy.

U.S. News and World Report tackles a myth that can be quite dangerous when in financial trouble. Many people avoid filing because they believe doing so paints them as a person who is financially irresponsible. This is not true. Many people get into financial situations due to circumstances beyond their control, such as an illness or divorce. People should decide whether to file or not based upon their finances, not because of myths they have heard.