4 Myths Related To Bankruptcy Claims

If you’ve been accumulating debt all your life, sooner or later you’re going to have to pay it back. You can’t wave a magic wand and make it all go away. If that was possible I’d be applying for loans right now. Who wouldn’t want to borrow money if they didn’t have to pay it back? Unfortunately you have to pay back your loans, with interest. It’s something I like to call reality. Claiming bankruptcy won’t help you the way you think it will. There are many myths circling bankruptcy claims and I’m here to put an end to them. So, let’s get started, shall we?

License: Creative Commons image source
License: Creative Commons image source

It’s Easy

People think if they are unable to pay their loans they can claim bankruptcy. Yeah, and I’m the Queen of England. Before you can claim bankruptcy you’re required by law to undergo credit counseling. Those guys will come up with a payment plan that will force you to repay every penny and dime you owe. That means you’re paying some guy to manage your finances and oversee the repayment of your loans. You could have started with that and avoided all this trouble, but you had to try and take the easy way out.

It’ll Take Care Of All Your Debt

Let me burst your bubble even before it forms. Claiming bankruptcy won’t exempt you from all your debts. In a Chapter 13 case you won’t be exempted from any of your debts. A Chapter 13 claim will only provide you adequate time to repay your debts. And a Chapter 13 is what most people are eligible for. Even if you are eligible for a Chapter 7 claim, you’ll still have a few debts left behind. I’m sensing this wasn’t the answer you were looking for. I separate truth from the fiction. I don’t make rabbits appear out of hats.

You Can Pay Them Later

The 2 main costs associated with bankruptcy claims are lawyer’s fees and court fees. Bankruptcy attorneys aren’t cheap and they’ll only file your claim when you pay them upfront. The same is true for courts. Unless you pay their fee your case isn’t going anywhere. Can you blame them? You’re a financial liability who’s filing
for bankruptcy. They can’t trust you. Who knows when they’ll get paid? So you better come up with the money, or you’ll be sleeping with the fishes.

You Get To Keep What You Own

Please, don’t make me laugh. You’re trying to weasel your way out of paying your debts and you think the court’s going to let you keep your stuff. Of course not! Sure they won’t throw you out of the house or take your car away, but they will sell your nonexempt property to repay some of your debts.While we’re on the subject of cars, let me remind you that you’re only allowed to keep one, that too of a certain value.

If you thought claiming bankruptcy was an easy way out, think again. It’s a crutch that allows you a fresh start. If you try to exploit that crutch, you’ll fall flat on your face.

About the Author: The author of this article, Richard King, is an intern at Goldbach Law Group, a reputed law firm providing affordable bankruptcy in Whittier. Richard is an avid traveler and loves to explore new travel destinations with his wife, Monica.

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