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Dispelling common bankruptcy myths

If you live in Georgia and feel as if your finances are spiraling out of control, you may be weighing your options and trying to determine whether bankruptcy may help you find the fresh start you need. While the process can sometimes prove complicated, the amount of misinformation out there surrounding the process can convolute matters even further, making it difficult to separate fact from fiction. At Harris and Hartman Law Firm, P.C., we recognize that many misconceptions surround the bankruptcy process, and we have helped many people facing similar situations make educated decisions about their finances.

Per Nerdwallet, one of the most common misconceptions about filing for bankruptcy is that, in doing so, you will automatically have to give up your home, your car and possibly other valuable assets. This is not, however, an absolute truth – instead, it depends on several circumstances, among them the type of bankruptcy filing you utilize. In a Chapter 13 bankruptcy, for example, you can typically hang on to your home and other key assets, provided you work out a payment plan to pay back at least part of their worth.

You may also be able to hang on to your house and the like through a Chapter 7 bankruptcy, depending on circumstances. You may be able to classify certain assets as “exemptions,” meaning you may be able to hold on to them despite filing for bankruptcy. Another common misconception about the bankruptcy process is that you should always work to pay down your debts before considering filing. This really depends on just how much debt you have, and just how much time it will take you to realistically pay it off.

If, for example, your debts add up to more than half of your annual income, and you do not believe you could sensibly pay it off within five years, bankruptcy may help you regain control over your finances within a more reasonable timeframe. Find out more about bankruptcy on our webpage.

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