Dispelling some bankruptcy myths
There are several myths associated with bankruptcy as Michigan bankruptcy attorney you often need to dispel the myths that have built up and have scared people off from filing bankruptcy.
One common myth is the person does not have enough debt to file bankruptcy.
While some people may not consider someone’s debt to be allot the person has to keep in mind the person income and potential earning power over the next 5-10 years. If a person is going to be so far in debt because they only have the skills to work at a job that pays minimum wage they can and should still use the bankruptcy protection as a way to help them through a financially difficult time. A person earning $10,000- 15,000.00 with $20,000.00 is much worse shape than someone with a skill, education and earning potential. The potential for the skilled person to increase their wages to pay down debt is much higher.
The next myth is all my debts will be wiped out in bankruptcy.
This is false, student loans backed by the government can not be discharged, and taxes owed to the government can not be eliminated in bankruptcy. Non custodial parents owing child support can not discharge these debts during bankruptcy. Other than these things all debts can be wiped out in bankruptcy.
One important myth is that your credit will be ruined for 10 years.
Bankruptcy will continue to show up on your credit report for 10 years. However, the day you are discharged from bankruptcy you can begin to rebuild your credit and start improving your credit altogether. One you are discharged it should not be too difficult to obtain a bankruptcy home loan after 2-3 years post bankruptcy. You can definitely accomplish buying a new home with in this time range if you immediately start to rebuild your credit and begin saving money. If you desire to buy a new vehicle you should be able to purchase a new vehicle with in one year and even less after bankruptcy. However, the rates you will receive will be terrible and is one of the costs you will have to pay for filing bankruptcy.
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