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If you're struggling to keep your head above water in an ocean of debt, filing for bankruptcy can seem like a literal lifesaver. However, it can also be incredibly intimidating, especially with so many misconceptions floating around. Fortunately, filing for bankruptcy doesn't have to be a frightening experience if you have a skilled attorney to guide you.

Impact on Your Credit

You might have heard that filing for bankruptcy will permanently destroy your credit rating and that you'll never qualify for a credit card or auto loan again. In fact, this couldn't be further from the truth. While having a bankruptcy on your record will lower your credit score, a history of missed payments or delinquent accounts can be much worse. You might also be surprised at how quickly you'll be able to get new credit, albeit at higher interest rates than you may have paid in the past.  This will allow you to reestablish your credit and in time you will be able to qualify for more favorable intebanruptcyrest rates.

Seizure of Assets

Some people are under the impression that filing for a Chapter 7 bankruptcy means giving up everything you own. Although the Bankruptcy Trustee may seize some of your property to pay back your debts, the law allows most individuals to retain a wide range of assets which are exempt from seizure.  In Western New York an individual can claim up to $82,775 in home equity as exempt.  Married couples who jointly own their home can claim up to $165,550 in home equity as exempt.  If you do not own a residence, you may be able to claim a “wildcard” exemption in any property including but not limited to cash or bank accounts of up to $13,100.  In addition, the law also allows you to retain your home furnishings, a considerable amount of jewelry, and a motor vehicle with an equity value of $3,775 under Federal exemptions or $4,425  under the NYS schedule of exemptions. 

Public Notification

Because bankruptcies are a matter of public record, some people who file worry that everyone will know about their financial situation. Typically only business bankruptcies receive newspaper publication.  While the information is always available to the public,  there is no reason to assume that your friends and relatives will be aware of your filing.

 

As one of Rochester's most established bankruptcy attorneys, Robert A. Schwartz has been helping individuals throughout the Western New York reclaim their lives from debt for over 30 years. To learn more about his wide range of services and to schedule a consultation, visit his website or call (585) 334-4270 for an appointment.

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