Although bankruptcy is sometimes the most logical choice when you are faced with insurmountable debt, common misconceptions often keep individuals from considering it as an option. Bankruptcy law was enacted to provide relief to those enduring financial hardship, and those same laws make it possible for you to file for bankruptcy protection without undue repercussions. See if the following scenarios match any of your own concerns.
I'll lose my home if I file for bankruptcy. In many cases, you will be able to keep your home when filing for bankruptcy. Homestead exemptions vary by state, but all exempt at least a portion of any equity you have. Also, the bankruptcy trustee could decide that the cost of selling the property would offset any proceeds left over to repay your creditors if you don't have much equity.
You may also be able to keep your home even if you do have a significant amount of equity, provided that you have adequate income to maintain a repayment schedule under Chapter 13. Ask your attorney to evaluate the specifics of your situation for advice on home retention.
I'll lose my possessions. Every state has conditions in place to protect a portion of your possessions. Among the types of items that are exempt, depending on the state, are clothing and other personal property, wedding rings, household furnishings, proceeds from life insurance, items necessary to perform in one's line of work, retirement or pension plans, and motor vehicles. Your attorney will advise you on what possessions are exempt. Part of the pre-bankruptcy planning with your lawyer will include converting nonexempt assets to exempt assets where allowed by law.
I'll lose my job if my boss finds out. Bankruptcy law is intended to protect those who find themselves in significant debt, and that protection extends to employment. Federal provisions prevent employers from discriminating against you because you held debt or did not repay debts that were discharged in your case. The law applies both to private and governmental employers.
I can't pay the filing fees. Under federal law, the courts must charge a case filing fee of $245; a miscellaneous administrative fee of $39; and a trustee surcharge of $15. The court may grant permission, however, for the fee to be paid in up to four installments, within 120 days of filing. If sufficient cause is demonstrated, the court can extend the payment period to 180 days after filing.
These are only a few of the common concerns and misconceptions many consumers have about bankruptcy. Because each case is unique, and due to the disparate requirements and exemptions in effect from state to state, it is best to consult an attorney about your specific situation.
If you have been faced with a bankruptcy related issue, and are seeking help, contact a
Kansas bankruptcy attorney at the firm to obtain the help you ned right away.