Dispelling Bankruptcy Myths
When you hear about bankruptcy from the outside, most of it is negative. For example, maybe your coworker has a relative who filed for bankruptcy and keeps bugging your coworker to cosign for a loan with him. News headlines about companies contemplating bankruptcy tend to be about the ones that have been in a tailspin since before the word “blog” entered your vocabulary. The surprising thing is not that the likes of Kmart and Blockbuster Video have the option of filing for bankruptcy; it is that these companies still exist at all. The closer you get to filing for bankruptcy yourself, the more it starts to seem like a nifty personal finance hack and less like a jerk move or an admission of defeat and despair. To find out more about your bankruptcy filing options, contact a Boca Raton family and small business bankruptcy lawyer.
Myth: Bankruptcy Is Only for Deadbeat Dads
Fact: There is no bankruptcy category that can discharge child support debts; even if your children are already grown up, you are still responsible for paying those debts to your ex-spouse or ex-partner. In fact, if past-due child support makes up a substantial part of your debt burden, then your bankruptcy filing could make it even easier for your ex to collect the money. If you file for chapter 7 bankruptcy, the court will discharge your eligible debts within a year, with or without selling some of your assets. When the family court looks at your income and assets after the bankruptcy filing, the court will see that you have fewer other financial obligations and therefore fewer excuses to avoid paying child support.
Myth: Rich People Can’t File for Bankruptcy
Fact: Everyone has the right to file for bankruptcy protection. As long as your debt obligations are so big that you cannot pay them, you have a chance of the court accepting your bankruptcy filing. Many high-net-worth people have filed for bankruptcy, some of them more than once. The greater the value of your assets, the greater the amounts you can afford to borrow. That means that, if a recession or COVID surge hits shortly after you take out a big loan, and the business project you had in mind for that loan fails to materialize, you could be stuck with debts you cannot pay, and a bankruptcy filing could be the best solution.
Myth: Bankruptcy Is Forever
Fact: Everything on your credit report is temporary, even bankruptcy filings. Chapter 13 bankruptcy involves abiding by a payment agreement for three to five years. Chapter 7 bankruptcy filings take effect quickly, but they disappear from your credit report within seven to ten years. Filing for bankruptcy does not mean the end of creditworthiness; you can start rebuilding your credit almost immediately after a bankruptcy filing.
Contact a South Florida Bankruptcy Lawyer About Your Bankruptcy Filing Options
A family and small business bankruptcy lawyer can help you strategy about life after a bankruptcy filing. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.