Due to some common misconceptions about bankruptcy, many New York residents who could benefit from filing do not. Many believe that bankruptcy is an expensive process that will drag on for years and leave them without anything to their names. However, if completed correctly, filing for bankruptcy can be the thing that puts a families back on track financially.
Some of the misconceptions that people have about bankruptcy are that they will lose all their possessions, they will not be able to receive credit for the next decade and that they will have to drag their spouse into the process. However, every state has exemptions that allow filers to keep many of their possessions. Filers also do not need to include their spouses in their bankruptcy claim although creditors may seek debts from the spouse who did not file.
After someone files for bankruptcy, they can still become eligible for credit offers. While these offers might be from subprime lenders that offer higher interest rates, bankruptcy filers can use one or two of these credit cards to re-establish their credit. Repairing credit slowly can then be a constructive way to learn good financial habits.
Filing for bankruptcy can be a difficult process. However, a lawyer could help to make the process smoother by guiding a filer through the paperwork, telling them what to expect in the bankruptcy hearing and answering any questions that a filer and their spouse may have. A lawyer could also help to make sure the process is completed as quickly as possible.
Source: Bankrate.com, “12 myths about bankruptcy“, November 18, 2014