When debt becomes overwhelming too often, people get talked into not filing bankruptcy because they have been told some things that are simply not true. As an Acworth bankruptcy attorney, I have had discussions with debtors who believe some of these Chapter 7 bankruptcy misconceptions:
- I could lose my home – in nearly all cases, if you are a homeowner, you will not lose your home when filing bankruptcy. As long as you can keep up your mortgage payments, your home will be saved in a bankruptcy proceeding.
- I could lose my job – your employer cannot consider a bankruptcy proceeding as a means of firing you from your job nor can it be considered when applying for most jobs. You are protected under federal law for discrimination when hiring based solely on your credit status.
- I will never be able to get credit – this is simply one of the biggest myths surrounding bankruptcy. As your Acworth bankruptcy attorney will tell you, in some cases, you can qualify for a new mortgage in as little as two years and because you are eliminating much of your debt, your credit rating may even increase. In some cases, within a few months of filing bankruptcy, you may be able to secure a new credit card.
- If I am married we have to file jointly – this is also another misconception about bankruptcy. Married couples have the option of both filing or a single Chapter 7 or Chapter 13 bankruptcy filing. Your Acworth bankruptcy attorney can help you determine whether it is more beneficial to file singly or jointly.
- I will owe taxes on discharged debts – while some creditors will issue a Form 1099C to show discharged debts, in nearly all cases, debtors will not have to pay taxes on the amounts that are discharged based on the exemption of “insolvent immediately before the cancellation”. Most debtors will be able to prove they were insolvent prior to filing bankruptcy.
- Medical bills cannot be discharged – it is unclear where this misconception originated; for many who file bankruptcy, one of the primary reasons is they have overwhelming medical debt.
- You do not have to include all your debts in bankruptcy – this could get you into trouble. On your list of debts, all creditors must be listed.
For those who are considering filing Chapter 7 bankruptcy, the best course of action is to meet with an Acworth bankruptcy attorney rather than taking advice from well-meaning friends or family members. The bankruptcy law is in place to help debtors who simply can no longer meet their financial obligations. Filing bankruptcy can help you get a fresh financial start and too often, people avoid speaking with an attorney because they believe many of the myths about filing bankruptcy.
Always make sure that you speak with an attorney before making any decisions about filing Chapter 7 bankruptcy; common myths can stop you from making the right decision. If you are uncertain whether bankruptcy is the right answer, contact Roger Ghai, a bankruptcy attorney in Marietta at the Law Offices of Roger Ghai at (770) 792-1000; I will be happy to review your current situation and help you make the right decision for you based on your current financial situation.