Bankruptcy is certainly a scary word and there are a lot of speculations that revolve around this term. However, when you learn the full truth, you will realize that the term does not seem to be as terrifying as it sounded earlier, which was mainly because of our ignorance. There a wide number of misconceptions regarding the term bankruptcy and some of the very popular myths have been unraveled so that you can enrich your knowledge regarding what really happens in a bankruptcy. Also, there are several misconceptions between the mortgage low rates and bankruptcy which have been clarified below.
Bankruptcies, Bankruptcy Lawyers In Tucson AZ, Bankruptcy Chapter 13,
1) Everyone will know about your bankruptcy
Unless you are a big shot or are a major corporation, the only people who will know about your bankruptcy are your creditors. The number of people who vouch for bankruptcy is so enormous that the public media will not have space to include details about each and everyone who goes for bankruptcy.
2) The debts are erased out as per Chapter 7 bankruptcy
All types of debts cannot be erased off and these usually include student loans, alimony and child support, reimbursement for a criminal act, and debts that have been incurred as a result of fraudulent acts.
3) I will be left with nothing
This is one of the biggest misconceptions of bankruptcy as there are certain exemptions that protect some of the assets of the people who have filed for bankruptcy.
4) I might not be eligible for credit again
This statement is as false as it can be and you will be certainly able to use your credit cards as soon as possible. However, the rate of interest will be comparatively higher. The case is the same for mortgages as people who have lodged bankruptcy will definitely be eligible for mortgages however, it basically depends on the lender if they qualify for mortgage low rates or not. Usually, individuals who have gone for bankruptcy have to opt for mortgages at higher rates. Also, they might not be able to secure loans at today's mortgage rates.
5) Both spouses have to file for bankruptcy
This is certainly a myth and it is not necessary at all.
6) Filing for bankruptcy is a tedious process
You will be surprised to learn that the bankruptcy option is not at all a tedious process and in fact it does not even require an attorney.
7) Only deadbeats have been known to go in for bankruptcy
This is not true as well and most of the people who lodge for bankruptcy have undergone a drastic experience in their life which is either the loss of job, divorce or even a serious illness wherein which they have failed to pay their bills for the past few months and have gone in for this option.
8) Bankruptcy will improve my credit ratings
Bankruptcy is the worst black mark that can occur on your credit report and a bankruptcy will never improve your credit rating. It is because of this reason that mortgage low rates are not applicable on you anymore and in fact the mortgages offered to you are at a very high rate than today's mortgage rates.
9) You can only file for bankruptcy once in a lifetime
The truth of the matter is that you are eligible for going in for the bankruptcy option every eight years and under Chapter 13 reorganization, you can file more often than that.
10) You will not be able to get rid of your taxes when you are in the bankruptcy situation
The above statement is generally true; however, if you file for tax bankruptcy then you can get rid of your taxes.
Thus, when you file for bankruptcy several factors are taken into consideration including your ability of procuring loans at mortgage low rates or at today's mortgage rates.
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