Five Personal Bankruptcy Myths Explored
Bankruptcy can be pretty scary, given today's unsettling economic times. However, if you are considering bankruptcy or have gone through one, you are not alone. In January 2011, The 2010 numbers showed that appx. 1.53 million people went through a personal bankruptcy. That was a 9% increase over 2009 numbers. The National Bankruptcy Research Center provided 2011 bankruptcy numbers through April, reported that 476,000 personal bankruptcies have been filed in 2011. If the economy improves we could see a trend of lower bankruptcies for 2011, but time will tell.
There are several myths about bankruptcies that are misconceptions. I came across a great article on Investopedia covering bankruptcy myths. West Palm Beach Bankruptcy Lawyer, Audra Simovitch, agreed that she hears these and more daily when working with bankruptcy clients in Florida and Massachusetts. She is amazed at how many people feel that they are in this alone and feel guilty about ashamed about their financial situations. "A bankruptcy is a way to get a fresh start. It is a restructuring of debts and assets and takes courage to admit that you want to improve your current situation.", said Attorney Audra Simovitch. "Hoping your debts will go away and not taking action will not make them disappear. Sometimes, lack of action, can make it worse.
Five Common Personal Bankruptcy Myths include the following:
1) You Will Lose Your House and Car - If you have significant assets, such as a vehicle or house, Chapter 13 may be an option which allows you to keep your assets and set up a payment plan with the creditors.
2) You Will Lose Your 401(k) or Retirement Assets - Certain assets are exempt from liquidation and distribution in a bankruptcy proceeding, including 401(k) plans and IRAs.
3) Your Credit Will Be Ruined - Bankruptcy only has a negative impact on your credit history - for a limited number of years. After a certain point it falls off the report.
4) You Won't Be Allowed to File for Personal Bankruptcy - Prior to 2005, there were limitations on who was able to file for bankruptcy. Changes to the law allow all debtors to do so now.
5) You Can Only Ever File Once - There are limitations on how many times you will be granted bankruptcy relief, but you can file more than once, given certain parameters.
The bankruptcy laws can be scary and complex, however, know that you are not alone and have several options. The main goal of a bankruptcy is to help someone through a financial crisis. Admission that you have a problem to solve is the first step. Consult with an experienced bankruptcy attorney that is honest and helpful and that will answer the tough questions on what steps you need to take for your fresh start.
click on the following links to read more on bankruptcy:
Bankruptcy Filings Leapt 9% Last Year - WSJ
National Bankruptcy Research Center April 2011 Bankruptcy Filings Report - NBKRC
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.