Explained By Kansas City Bankruptcy Attorneys
Bankruptcy has a bad reputation in the United States. However, this is because of common misconceptions surrounding bankruptcy. Far too many people believe bankruptcy means you are irresponsible, or that you will lose all your belongings. Bankruptcy is an effective way to wipe away debts while protecting important assets from creditors. Below, our Kansas City bankruptcy attorneys explain some of the most common bankruptcy myths.
Bankruptcy Means Losing All Belongings
Bankruptcy does not mean losing all of your belongings. When you file for Chapter 13 bankruptcy, you pay back certain debts through a three to five-year repayment plan. You may keep your property during the Chapter 13 bankruptcy. Additionally, you may receive a discharge on remaining unsecured non-priority debts at the conclusion of a Chapter 13 case. However, only filers with a regular source of income can file for Chapter 13 bankruptcy.
Another option is Chapter 7 bankruptcy. Depending on the circumstances, you may be able to exempt certain properties or assets from your bankruptcy case. For instance, under the Missouri Homestead Exemption, homeowners can protect a certain amount of equity in their homes. There are also Missouri bankruptcy exemptions for other types of personal property, such as vehicles, household goods, jewelry, retirement accounts, and guns.
Kansas also has specific exemption laws protecting the value of your house, personal belongings, vehicles, retirement accounts, and other valuable assets.
Bankruptcy Stops Lawsuits, Repossession, Judgments, or Garnishments Once they have Started
When a person files for bankruptcy, a legal protection call the automatic stay immediately goes in to effect. This stops lawsuits, foreclosure, repossession, judgments, garnishments, and most all other types of collection activity against you, even if these collections activities have already started.
Bankruptcy Means Permanently Destroyed Credit Scores
False. Your credit scores can recover even after filing Chapter 7 or Chapter 13 bankruptcy. While might be an impact on your credit when you file for bankruptcy, it is possible to begin improving your scores immediately after your case concludes.
After your Chapter 7 Chapter 13 bankruptcy is complete, several actions assist in rebuilding credit. Regular income going forward shows potential lenders you can afford to pay back debts. Also, paying your regular expenses and any existing debts help establish a payment history going forward.
If you are facing insurmountable debts and creditor collection actions, then waiting to file for bankruptcy can be catastrophic for long-term credit health. Credit bureaus may add more harmful information to your reports. You could also lose your property to creditors.
Married Couples Have to File Bankruptcy Together
It may be possible to file for bankruptcy without involving your spouse. However, some spouses may share liability for debts, which could make it beneficial for both spouses to file. This is because if one spouse were to file bankruptcy but the other did not, creditors could still go after the spouse who did not file a case.
We encourage you to contact our bankruptcy lawyers for a consultation if you have questions about filing a bankruptcy case with your spouse.
You Cannot File for Bankruptcy Multiple Times
Hopefully, a single bankruptcy is enough to rebuild your finances. However, you may file for bankruptcy more than one time under the right circumstances. Contact our Kansas City bankruptcy lawyers to learn more about eligibility.
Bankruptcy Discharges All Types of Debt
Certain debts are difficult to discharge, and some are not possible at all. Student loans are the most well-known example of a debt that is difficult to discharge. With student loans, you must demonstrate undue hardship to receive a discharge. The rules for demonstrating undue hardship vary depending on where you file and your specific financial situation.
Bankruptcy also cannot discharge unpaid child support or alimony (spousal support). You also cannot discharge certain tax debts in bankruptcy.
Bankruptcy Filers Are Financially Irresponsible People
Injury, illness, job loss or divorce can strike without warning. Life may sometimes kick us when we are down. Bankruptcy provides a lifeline for people who may have experienced difficult life circumstances, often through no fault of their own. Filing for bankruptcy does not mean a person is irresponsible.
Questions About Bankruptcy in Missouri?
Do you still have questions about filing for bankruptcy in Missouri? The Kansas City bankruptcy attorneys at Troppito Miller Griffin, LLC can answer your questions. If you have questions about Missouri bankruptcy exemptions or filing options, call (816) 320-6527 or use the contact form on our site.