Finances are a tricky subject for most people. Whether they are personal finances or business related, there are often pitfalls, mistakes and problems that can arise just from the day-to-day issues of trying to run a business or household. It’s not uncommon to find that you’ve made some mistakes (who hasn’t?) and that maybe you’re in over your head. If you’re considering bankruptcy, there are a few misconceptions that you might want to be aware of.
- Bankruptcy will ruin your credit forever. In truth, your credit will take a hit if you file for bankruptcy. However, it doesn’t mean that you’ll never be able to apply for a credit card or housing again. Bankruptcy stays on your credit report for a maximum of 10 years, and during that time you can work on making payments on time and building your score back up. Some mortgage lenders will work with you on a mortgage loan after 3 years.
- All your debt can be wiped clean! This is often the appeal of bankruptcy for most people– the thought of being able to get out from under all your debt! Federal Student Loans and some tax debt are not eligible for discharge under bankruptcy.
- Bankruptcy is evidencing your failures. Bankruptcy doesn’t carry the stigma it once did. Many people file for bankruptcy today not because of poor money management, but because of medical bills or an unforeseen change in the market.
- I don’t need to spend money on an attorney. Actually, you can’t afford not to! Spending the money to pay a bankruptcy attorney can ensure that you’re getting the best possible result from your filing and a better understanding of the proceedings.
If you’re looking for more information on bankruptcy for you or your business, our team at the Law Office of Melissa Stewart, formerly Groff Law Firm, would love to help.