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BLOG: Bankruptcy Myths - Week 1

This blog includes three myths about Bankruptcy: concerning repossession of real and personal property as well as financial standing to purchase assets after a bankruptcy has been filed.

Bankruptcy to many people is like a forbidden thing.  It's NEVER to be done. Many times people wait until they're lives have fallen to complete shambles before even considering Bankruptcy.  Guess what?  Bankruptcy IS NOT the end of the world, and certainly IS NOT the end of your financial future or credit.  I will post weekly on more Bankruptcy Myths.

Bankruptcy myths:

Myth: I will never be able to buy a car or home again.

Truth: Many individuals purchase a vehicle a year after filing for Bankruptcy and some even purchace vehicles while going through Bankruptcy. Some people get approved for a mortgage to buy homes 3 years after filing for Bankruptcy. Assuming you continue to pay your bills on time, your credit can increase 100 points once you are a year out from filing Bankruptcy.

 

Myth: I will lose my home and my vehicle will be repossessed if I file for Bankruptcy.

Truth:  Your home and/or vehicle does not have to be included in a Bankruptcy.  Should you choose to surrender your home or vehicle, the deficiency owed on it can be included in your Bankruptcy.  However, should you choose to keep your home and/or vehicle, you will fill out what's called a reaffirmation agreement with your lender which tells your lender that you will pay on your asset as agreed to and that you will not be putting it into your Bankruptcy.

 

Myth: My creditors (furniture company, and etc.) will take all of the belongings in my home and sell them if I file for bankruptcy.

Truth: Only if your creditors have a security interest in the property in your home can they sell your belongings, otherwise, they cannot touch your things. Meaning, you would have had to sign an agreement with the creditor when the credit was extended to you initially, giving them permission to take your property if you were unable to pay them.

If you want more information on Bankruptcy or are considering filing for Bankruptcy, please visit www.mysmithlegal.com or give us a call for your free consultation at 240-245-0015.  

Also, we offer Legal Information Courses through the City of Laurel.  Please visit our website for more information.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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