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Myths about Bankruptcy in Florida

Gainesville Bankruptcy Attorney

In bankruptcy, much is at stake. Maybe you are worried about losing your house, or you are concerned about your financial future after bankruptcy. You may be afraid of what you will lose, or fear that a bankruptcy attorney is unaffordable. Perhaps you feel that bankruptcy is a point of no return and that your credit will bedestroyed. Fortunately, many of these fears do not have any legitimate backing. At The Law Offices of Justin McMurray, P.A., we are committed to helping our clients understand the whole process of bankruptcy as we help them navigate all its complexities. Our Gainesville bankruptcy lawyer can debunk a few myths even now.

Myth #1: I Will Lose Everything

In Chapter 13 bankruptcy, your payments are reorganized so that you can get caught up on things like your mortgage. In many circumstances, you have a good chance of keeping your house and other property, as long as you stay caught up on your new payments. These payments are meant to be more manageable. In fact, the 3 to 5 year process can be enough to ward off foreclosure. In Chapter 7 bankruptcy, the delay can also be enough to avoid foreclosure. There are other ways to keep your property during bankruptcy as well. While some assets are liquidated to pay off creditors in Chapter 7, there are still exemptions that require trustees to leave other assets untouched. There is a good chance that with either bankruptcy, you may be able to keep everything.

Myth #2: All My Friends and Family Will Know if I File for Bankruptcy

This is true only if you are a celebrity or a public figure of some sort. Your creditors are probably the only people who will know about the bankruptcy. Millions of other people are filing for bankruptcy every year, so there is no reason that you should feel ashamed or embarrassed about filing. It is a common and practical way for many individuals and families to find the relief from debt that they need. In most cases, the only way others will know that you filed for bankruptcy is if you tell them.

Myth #3: I Won't Be Able to Discharge Back Taxes or Medical Bills

There are circumstances when much of your back taxes can indeed be erased, though this is not usual. A bankruptcy attorney will know if your situation qualifies for back tax discharge. Medical bills are one of the top reasons that people file for bankruptcy in the first place, and this debt is called unsecured debt. In most bankruptcies, nearly all unsecured debt will be discharged. This means credit card bills and personal loans may be erased as well.

Myth #4: Bankruptcy will discharge all my debt!

Bankruptcy does not exactly wipe the slate clean. In Chapter 13 bankruptcy, you will be paying a good deal of debt off yourself through a restructured payment plan before any unsecured debts are discharged. You will have to stay on top of all your payments. Even though Chapter 7 bankruptcy can discharge a vast amount of unsecured debt, bankruptcy is not a means of eliminating all debt whatsoever. For example, you can almost never get rid of student loans. Certain types of taxes can never be discharged, and bankruptcy cannot remove child support or alimony obligations. You cannot discharge criminal fines either.Even though some people think bankruptcy can help their credit score by discharging debt, this is untrue as well. Bankruptcy can hurt your credit score, though this is only temporary and can be fixed.

Myth #5: If My Spouse Files for Bankruptcy, I Need to File too

While filing jointly for bankruptcy is an option, it is not necessary. Depending on your circumstances, it may be better for your spouse to file individually. This is an especially good idea when one spouse has a greater amount of debt, and the other spouse has a great deal of assets and property. To protect these assets, only the spouse who has heavy debt to will want to file. When one spouse files, the other spouse's credit is unaffected. If both spouses need to get a handle on their debt, however, then filing jointly can be a good idea, saving both time and stress.

Myth #6: My Credit Will Be Ruined Forever

It is only a matter of time before your credit recovers. Immediately after you file, you should keep up on all your payments. Soon, it will be time to work on restoring your credit. One way you can do this is to use a credit card for small expenses so you can pay those off promptly. It will often take no more than a year, and sometimes less, before you are able to get a credit card again.

Myth #7: It is Difficult to File for Bankruptcy

Granted, there is a great deal of paperwork to fill out, and it can be a stressful time as you face financial hardship, but with the right bankruptcy attorney, the process can be made simple. Legal assistancecan help alleviate your stress and enable you to focus on other more important matters.You may find that it is harder to make the choice to file than it is to actually begin the bankruptcy process.

Myth #8: Filing for Bankruptcy Makes Me a Failure

Of course financial irresponsibility can lead to bankruptcy, but most people who have to file do so for reasons outside their control. An unexpected layoff, a divorce, or a medical condition are all circumstances that can force responsible people to seek bankruptcy. One Harvard study found that 75% of those who filed for bankruptcy had to do so because of medical bills. This included a great number of educated people who were holding good jobs, yet they faced astronomical debt once they had to pay for medical treatments. Many of them even had health insurance.You cannot control emergencies and thankfully, bankruptcy is one of society's safety nets.

Myth #9: I Can Only File for Bankruptcy Once

After eight years, you can file for Chapter 7 bankruptcy again, and it takes even less time to qualify for Chapter 13 a subsequent time. Of course, this is not ideal, and an experienced Gainesville bankruptcy attorney can help you explore other alternatives to bankruptcy.

Myth #10: I Won't Be Able to Afford an Attorney

In Chapter 13 bankruptcy, retaining a bankruptcy lawyer is of no extra cost to you, since the money that is used to pay off your creditors can also be used to pay attorney fees. Your restructured payments would be the same whether or not you have an attorney. Why would you choose to be without legal help? With Chapter 7 bankruptcy, you pay at the outset. If necessary, credit card payments can be delayed to enable you to afford a bankruptcy lawyer.

Affordable and Reliable Bankruptcy Lawyer in Gainesville

You can find the bankruptcy attorney you need at The Law Offices of Justine McMurray, P.A. Get started on your case today by scheduling a free consultation with our Gainesville bankruptcy firm. Our firm also offers a free case evaluation for you to fill out online, another step you can take toward a healthier financial future. We offer our excellent services in both Spanish and English, and we have offices located in Ocala, Daytona Beach, and Gainesville. If you are a Florida resident considering bankruptcy, we have the legal counsel you need. If you have any further questions, do not hesitate to contact our firm today!

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