For a person that has fallen into excessive debt or that is experiencing other financial hardship, seeking the protection of bankruptcy can be one of the best steps that these individuals can take. Unfortunately, there can be substantial misinformation about this type of protection, which can lead to an individual failing to effectively evaluate whether this can be a viable solution to their situation.
Myth: Bankruptcy Is An Option For Eliminating All Of Your Debts
While there are many debts that can be discharged through the bankruptcy proceedings, there are some that are exempt from these proceedings. Two of the most common are tax debt and student loans. Despite these debts not being dischargeable, you may still find that it can be possible to negotiate better payment terms for them. This can give you a reprieve while still ensuring that you are able to pay off this debt.
Myth: Bankruptcy Is A Quick Process
As soon as you file for bankruptcy, you will be given protection against aggressive action by creditors. However, this should not lead you to assume that the bankruptcy process will be quick. Depending on the type of bankruptcy that you are seeking, it may take several months before the case is fully resolved. During this time, there will need to be a series of negotiations with the creditors as well as schedule court proceedings where a judge is able to finalize the terms of the bankruptcy. As a result, you should consider starting bankruptcy proceedings as soon as you recognize that you are facing debts or other financial challenges that you may not be able to meet otherwise.
Myth: You Can Only Apply For Bankruptcy One Time
Some people may assume that they will only be able to apply for bankruptcy protection once during their lives. In reality, it is possible for individuals to apply for this protection multiple times, but there is often a time limit between when they are able to seek this protection. The time limit between bankruptcy filings can be heavily determined by the type of bankruptcy that is being sought. Due to this, you should consult with an attorney as to when you will be able to seek this protection again in the future. While you will want to avoid this as much as possible, it can be an unavoidable situation, and knowing the amount of time between filings can help you manage these potential problems in the future.
Contact a bankruptcy attorney to learn more.