5 Bankruptcy Myths-Debunked

5 Bankruptcy Myths-Debunked

5 Bankruptcy Myths-Debunked Image

1. If I file for bankruptcy, it shows I am financially irresponsible. 

Not true! Most people file for bankruptcy due to circumstances beyond their control. Divorce, job loss, illness, are some of the most common reasons we see. Just the other day I saw a $40,000 medical bill for a MedEvac flight, my client didn’t choose to have a heart attack and need emergency care in Minneapolis! 

2. I make too much money to file bankruptcy. 

Not true! There are two types of consumer bankruptcy and only one has income guidelines. A chapter 13 bankruptcy is designed for higher wage earners that can afford to pay something back to their creditors. It’s an affordable way to get back on top of your debt, without making minimum payments for decades to come! 

3. If I am married, my spouse has to file Bankruptcy too. 

Not true! You also have the choice to file an individual bankruptcy or a joint bankruptcy with your spouse. If you choose to file individually, a bankruptcy cannot be reported on your spouses’ credit. Many people will file individually if they want to try to preserve a spouses’ credit score. 

4. I will lose all my property if I file bankruptcy. 

Not true! Minnesota has some of the best bankruptcy asset protections in the country. In Minnesota you have two choices in which law to use to protect assets. The vast majority of people who file bankruptcy lose nothing. That means your house is protected, your vehicle, retirement account etc. 

5. I will never be able to get lending for a car or house again. 

Not true! Most of my clients are able to get financing for a vehicle immediately after filing. To refinance or apply for a mortgage, the timeline is usually only a couple of years. Many lenders will want to lend to you because they don’t see you as the credit risk you were when you had your previous debt load. 

Call Bill or Margaret today to learn more about your debt options

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