Many people are under the mistaken impression that filing for any type of bankruptcy basically constitutes financial ruin. This is certainly NOT the case, and thousands of people file every year—and are often significantly better off than they were prior to filing. Here is the truth about 4 persistent myths about Chapter 13 bankruptcy.
Everyone Who Files for Bankruptcy Is Financially Irresponsible
Sadly, many people think that people who file for bankruptcy have somehow been financially irresponsible. This could not be further from the truth. Individuals file for chapter 13 bankruptcy for a variety of different reasons. An individual’s debts can spiral out of control for reasons such as unexpected medical expenses or sudden and drastic change income. Because chapter 13 bankruptcy is designed to organize one’s debts in a manner that facilitates repayment over time, this option could be considered much more financially responsible than trying to pay debts that you can’t afford!
Individuals filing for chapter 13 bankruptcy develop a repayment plan. This plan is developed as the parties calculate a number of regular payments, over a period of three to five years, in which the debtor can repay his or her outstanding debts. Thus, a debtor takes control of his or her finances and makes regular payments in order to repay his or her debts.
Your Payment Will Be Financially Difficult
A repayment plan, under chapter 13 bankruptcy, is designed in a way so that a debtor can meet his or her repayment obligations taking his or her income into consideration. When preparing a repayment plan, the parties evaluate the debtor’s overall outstanding debts, his or her current and steady income, and the availability of exemptions to reduce overall debt obligations.
A change to a debtor’s financial situation is manageable. Although debtors have a legal obligation to make timely payments under their repayment plan, it is understood that one’s financial situation may change. Debtors may lose their jobs or suffer an emergency which impacts their finances. Should this occur, a debtor need not fear that his or her case will be dismissed. In fact, many courts and bankruptcy trustees recognize that these events do occur. In the event that a debtor’s financial situation changes, alternatives for repaying those obligations in arrears can be made available to financially-troubled debtors.
You Will Never Get Credit Again
Many individuals are worried that, should they file for bankruptcy, they will be unable to secure a line of credit in the future. This is simply not true. Yes, credit does impact an individual’s credit in the short term, but many people who file for bankruptcy are able to obtain credit within a few months or years of filing. Furthermore, notice of a bankruptcy will remain on one’s credit for a maximum of 10 years. After, the individual’s credit report will be wiped clean of any bankruptcy.
Filing Without a Lawyer Is Easy
Filing for bankruptcy without a lawyer is permitted. Filing without an attorney is known as filing pro se. However, while filing for bankruptcy without a lawyer is possible, it will not always be done well. Instead, a debtor may find it difficult to prepare all of the necessary documents, identify potential exemptions, or even understand whether or not he or she qualifies for certain bankruptcy exceptions.
Call Us Today to Speak to a St. Petersburg Bankruptcy Attorney
Here at Berkowitz & Myer, we are determined to help you in this difficult time. We will evaluate your property and help you prepare and execute the chapter 13 bankruptcy filing that best suits your situation. Schedule your initial consultation by calling our office today at (727) 344-0123 or sending us an email through our online contact form.