Bankruptcy is often painted in an unfair light, but there is little truth to the bankruptcy myths that you might have heard. Keep in mind that a phoenix chapter 13 bankruptcy lawyer can also help advise you on any questions you might have.
Myth #1: You Are Able to Declare Bankruptcy Just By Announcing it in Public
Filing for bankruptcy is not just as easy as announcing it. Bankruptcy filing requires steps such as: paying a fee, completing credit counseling, and also submitting legal paperwork and financial disclosures.
Myth #2: You Are Only Allowed to File Bankruptcy Once
While there are laws regarding the frequency in which you file for bankruptcy, the following is true:
- You can receive a discharge from a chapter 7 bankruptcy once every 8 years
- You can receive a discharge from a chapter 13 bankruptcy every 2 years
- If you discharge debt through a chapter 7, you must wait 6 years before getting a chapter 13 discharge
- If you discharge debt through a chapter 13, you must wait 4 years to obtain a chapter 7 discharge.
Myth #3: A Bankruptcy Affects Your Spouse
If you’re married and have separate debt, filing bankruptcy does not automatically affect your spouse’s credit. If the debt is in both your names, then it’s advised by a phoenix chapter 13 bankruptcy lawyer that you file together. Otherwise, a creditor will demand payment for the entire debt from the non-filing spouse.
Myth #4: You Can Go to Jail for Debt Owed
It is not against the law to owe money. This means you cannot go to “debtor’s prison” in the United States.
Creditors are able to sue you for debt, as well as take you to court, put liens against your property, and garnish your wages, but they are not legally able to send you to court.
Myth #5: Filing for Bankruptcy is Expensive
Filing fees for chapter 7 and 13 bankruptcies vary from state to state, but are no more than $300. While hiring an attorney can add to this, it’s always advised that you work with a bankruptcy lawyer because bankruptcy laws are complicated.
It’s much safer to hire and pay for a lawyer than pay penalties in bankruptcy court.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 13 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
AZBK Lawyers 668 N. 44th St., Ste 320, Phoenix, AZ 85008 (602) 648-3274