If you can barely make ends meet due to mounting debt but worry that filing for bankruptcy has too many drawbacks, it is worth talking to a bankruptcy law attorney about your options. Although several debt relief myths make declaring bankruptcy sound risky or unappealing, it can be the perfect financial tool for many people. Below, the seasoned team at Anderson Law Firm in Archdale, NC, debunks some of the most common misconceptions, so you can separate fact from fiction.

Demystifying 3 Common Bankruptcy Law Myths

1. Do I Have to Repay All the Debt?

If you had to repay all debts after declaring bankruptcy, there would be no reason to file. Doing so would not improve your current financial situation or credit history. The misconception that you must pay back all debts likely arose because of the terms you must follow after filing.

Although it is true that nonexempt assets are liquidated in Chapter 7 to pay back debtors, most people do not have enough significant assets to cover all their debt. In these scenarios, eligible debts are simply discharged under bankruptcy law, which means the borrowers do not have to pay them back.

2. Will My Credit Be Destroyed Forever?

Filing for bankruptcy will affect your ability to qualify for various financing arrangements, but this impact is temporary. Although bankruptcy can remain on credit reports for up to a decade, it will stop affecting your score within a few years of filing. Chapter 7 filings are removed after 10 years, and Chapter 13 filings are removed after seven years.

3. Will I Lose All Assets?

Qualifying for Chapter 7 bankruptcy allows you to retain possession of all exempt assets, regardless of how much you owe. This includes a portion of the equity in a primary residence, motor vehicles up to a certain value, household appliances, necessary goods and furnishings, pensions, and public benefits you accumulated and kept in a savings account.

If you need debt relief in North Carolina, contact Anderson Law Firm for legal guidance. A bankruptcy law attorney will assess your financial situation and determine the best way to proceed. To learn more about their experience assisting clients with Chapter 7 and Chapter 13 bankruptcy, visit their website, or call (336) 431-7336 to schedule a consultation in Archdale today.

The information contained in this site is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. We are a Debt Relief Agency. We help people file for Bankruptcy Relief under the Bankruptcy Code.