Bankruptcy is a helpful debt relief option for people struggling with their finances. Common misconceptions about the process may keep people who could benefit from bankruptcy from filing. Some of the most common bankruptcy myths include:
- Bankruptcy permanently destroys your credit. Your credit scores are not permanent. You can begin to improve your credit scores after bankruptcy by paying your bills or any remaining credit obligations on time. Although bankruptcy will remain on your credit reports for up to ten years, you may still receive offers from lenders if you can show financial stability.
- Student loans are non-dischargeable. It is very difficult to discharge student loans in bankruptcy, but it is not impossible. You do have to show that repaying the loans would impose an “undue hardship” on you or your dependents. Some bankruptcy filers, such as those with permanent disabilities, may have an easier time showing undue hardship than others.
- You will lose your assets. Chapter 13 bankruptcy allows you to retain and potentially keep important assets. There are also assets that are exempt. We have a listing of bankruptcy exemptions in New Jersey on our website.
- Bankruptcy can discharge all types of debt. Past-due child support, certain tax debts and alimony are non-dischargeable. Medical bills, credit cards and many other debts are dischargeable, which may make it easier to pay back non-dischargeable debts.
- You can go on a spending spree before filing. While bankruptcy can discharge many debts, this does not mean you should go on a spending spree before filing. The debts you incur may become non-dischargeable. At worse, you could be accused of bankruptcy fraud.
Questions About Bankruptcy? Call Our New Jersey Bankruptcy Lawyers for Answers
Our New Jersey bankruptcy lawyers help individuals and businesses seek debt relief. If you have questions about filing for bankruptcy, whether for yourself or for your business, then we are here to provide answers. You may contact Garland & Mason, L.L.C by using our online contact form or by calling (732) 358-2028.