Common Misconceptions about Bankruptcy Dispelled by a Bankruptcy Attorney

Leominster, nicknamed Pioneer Plastics City, is a city of 40,759 (2010 census results) in Massachusetts’s Worcester County. Although not as hard hit by the current economic crunch as the rest of the U.S., the city is still recording some bankruptcies. Many Leominster residents fail to file for bankruptcy protection because of their fears about bankruptcy. Most of these fears are born from common misconceptions about bankruptcy. A good bankruptcy attorney Leominster will help you understand the common misconceptions.

There is a common misconception that you must be flat broke to get bankruptcy protection. The fact is that you will get bankruptcy protection provided you are not able to repay your bills on time. Examples are that you could file for bankruptcy protection if you earn less than the Massachusetts median income or if you have been unemployed and you can no longer catch up with your debt repayments with Chapter 7 bankruptcy.

Another common misconception is that you will not quality for future credit if you file for bankruptcy. Your bankruptcy attorney will advise you that the fact is that the bankruptcy filing will only appear on your credit report for about 10 years (it is not permanent). You can get financing during this period, albeit at higher interest rates. Most lenders will approve mortgage loans for you to buy a house.

There is misconception that you will lose your property when you file for bankruptcy. The fact is that filing for bankruptcy is actually meant to protect your assets. As an example, you will be able to keep your house and your car when you file for Chapter 7 bankruptcy protection.

Yet another common misconception is that taxes cannot be discharged when you file for bankruptcy. The fact is that personal income taxes and a few other taxes can be discharged. It is only fiduciary taxes that are exclusively not dischargeable. You should have a bankruptcy attorney Leominster explain the provisions of the Bankruptcy Code that relate to taxes to you since these are complex and they differ by chapter. Another common misconception is that student loans are always non-dischargeable. The fact is that this is generally true, but there are exceptions. Similarly situated creditors, according to the Bankruptcy Code, are to be treated equally.

There is a misconception that family members who loan money to their kin will lose out following a bankruptcy filing. The fact is that with the help of a bankruptcy attorney, you can get court approval to repay your relatives for such reasons as maintaining existing business relationships. Other common misconceptions that your bankruptcy attorney should help you with are that your friends, colleagues or family will find out about the bankruptcy, that you will lose your job, that you cannot get a credit card for 7 years, and that you can only file for bankruptcy once.