Finance MONEYTALKS

Bankruptcy Myths and Misconceptions

Bankruptcy is a relatively recent phenomenon that has come into common use everywhere. However, during this period, it managed to acquire a mass of rumors and myths. Here we will talk about the most common misconceptions about the bankruptcy procedure and the most common myths.

Over many years of practice and experience in the field of bankruptcy, we realized that, unfortunately, not all citizens can afford to conduct bankruptcy proceedings. This category of people includes pensioners, low-income families, large families, and people with disabilities. The company makes it possible to declare it bankrupt and write off unbearable debts at a cost that will only amount to mandatory payments prescribed by law.

Well, in general, before deciding which law firm or specific lawyer to work with, it is important to understand their competencies, judicial practice, and experience. This issue is very important since there is a risk of running into unscrupulous people and wasting money. Many do not even know that all this information is open; it can be viewed on the official federal resources. The one famous company is ready to provide all the facts confirming the competence, experience, and judicial practice of a particular lawyer and financial manager.

Moreover, today here we will tell about Bankruptcy Myths and Misconceptions that mislead the citizens of our country.

Bankruptcy is a way out for those who are tired of repaying a loan

The bankruptcy of individuals is recognition by an arbitration court of a citizen’s inability to fulfil financial obligations and settle accounts with creditors. If your total debt exceeds $500 thousand and is overdue for more than 3 months, you must apply to the arbitration court with a petition for declaring yourself bankrupt.

Only the debtor himself can start the bankruptcy procedure

A creditor with a debt to whom there is debt can also start the bankruptcy procedure. In this case, who got up first, that and the slippers? If the lender applies, you will not have the opportunity to meet with your Treasurer in advance and enter the “guided procedure”. The financial manager is a key figure in a bankruptcy case, too much depends on him. It is important to have time to develop an action plan. And you can do this when you yourself initiate the bankruptcy procedure. We are ready to provide a financial manager and discuss all the details of your case in advance.

An apartment will be taken away to pay off debts

If this is the only home, it will not be taken away (except if the apartment or house is in mortgage).

In general, there is a list of things that are not subject to collection to pay off debt. Among them, for example, household items, household items, personal items, clothes, and shoes, as well as property necessary for work (for example, a car registered as a taxi).

If there is no property to pay off the debt, relatives will have to pay

Usually, these are just threats from collectors. It is important to understand that if the debtor does not have the property that can be used to pay off the debt, then he is exempted from further repayment of funds in full.

You can declare yourself bankrupt without outside help

If you have the legal knowledge, the experience of representing your own interests in court – this is really so. However, an ordinary person will have a very, very difficult time. In our experience, one application to the court can reach 300–400 pages. And besides, if you can declare yourself bankrupt, then according to the law you cannot do without a financial manager.

Another misconception many have regarding bankruptcy is that when it is over, all debts will be gone. Bankruptcy will discharge many types of debt, some will remain. Debts that cannot be cancelled include child support and school loans.

The notion that when planning bankruptcy one can accumulate a large amount of debt and then discharge it is another fallacy. Courts across the country have found the action to be a fraud and, as a result, those debts cannot be cancelled.

Some people may resist filing for bankruptcy because they fear it will have an eternal impact on their credit. While it will of course take time to restore it, for those who make the right decisions in the future, there is no permanent damage.

The last myth we will address today is perhaps the most important for anyone considering applying. It’s the idea that filing for bankruptcy and paying off your debt will fix everything. Not all debt types are dischargeable. Depending on what one plans to keep, such as a home, large monthly payments may still need to be made.

How to file for bankruptcy ?

Once you have decided which of the bankruptcy chapters best fits your financial needs and long-term goals, then you can file the required documents with the Bankruptcy Court. You should also be prepared to pay all applicable filing fees at that time.

After you officially file for bankruptcy petition with the court, all creditors will be notified and you will enter an automatic waiting period. This means that your creditors cannot contact you about paying your debts; and instead, all discussions about the satisfaction of existing debts will go through the court.

Tulsa bankruptcy lawyers

Tulsa bankruptcy lawyers can help you navigate the legal system avoiding costly procedural errors. Remember to find an attorney whose practice focuses on the area of ​​law that is most relevant to your case.

During the consultation, you should understand the relevant legal experience that an attorney brings to face your case. While it is not realistic to expect the attorney to resolve your case during the initial consultation, you should leave the consultation confident in the Tulsa bankruptcy lawyers’ ability to resolve it. A good consultation with the attorney will clarify the matter, discuss the questions and considerations specific to your case, and help you make informed decisions to resolve your legal situation.

Final words

The bottom line is that, as is the case with any major decision, it is important to obtain as much data as possible before determining which way to go. Bankruptcy is no exception. A bankruptcy lawyer can provide you with many of those answers and help you determine the best way to proceed.

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