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Bankruptcy myths to ignore

Filing for bankruptcy may be a last resort for many, but it doesn’t mean that it will leave debtors with nothing. In many Chapter 7 cases, Florida debtors do not lose an asset either because it is exempt, not worth anything or has a loan or lien on it. In Chapter 13 cases, debtors for the most part keep their property until the case is resolved at the very least.

While bankruptcy can be a way to get out of debt, it may not discharge all debts. Student loan debt is rarely discharged while tax and child support obligations will not be discharged. Bankruptcy is designed to help deal with credit card, medical and other personal secured or unsecured loans. Although not all debts may be discharged, it may still help a debtor significantly lower his or her monthly debt payments.

As a rule of thumb, those who pay more than half of their income toward debt may prefer bankruptcy over other debt relief options. This is especially true if it will take more than five years to completely pay off the debt. It is important to understand that bankruptcy is not seen as a sign of poor money management. In fact most new filings are the result of stagnant wages failing to keep up with higher costs.

Filing for bankruptcy may be an effective way to get a fresh financial start. Those who are struggling with credit card, medical or small business debt may be able to have their debts discharged in as little as a few weeks or months. An lawyer may be able to help a debtor determine if bankruptcy is an appropriate debt relief mechanism as well as which type of bankruptcy may be the best to pursue.

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