In 2012, more than 1.2 million bankruptcy petitions were filed by both individuals and businesses across the nation. If you are facing mounting bills and are contemplating filing for bankruptcy in order to obtain debt relief, it is crucial that you obtain accurate information regarding the process, and it is recommended to consult with an attorney to evaluate whether bankruptcy is right for you.
Debtors are often hesitant to file for bankruptcy due to a lack of information or based on several common bankruptcy misperceptions:
Ability to own property
Though many debtors believe they will be prevented from owning anything for a period of time following filing for bankruptcy, this is a misperception. A debtor is allowed to keep all property specified as "exempt" by state or federal law.
Protection of retirement accounts
Despite the commonly-held view that filing for bankruptcy will lead to the loss of retirement funds, a special exemption in federal bankruptcy law protects funds held in ERISA qualified pension plans ― and IRAs with certain limitations.
Court attendance requirement
Debtors are often fearful that they will have to attend lengthy bankruptcy court proceedings. However, a bankruptcy petitioner is typically only required to attend a brief “meeting of creditors” proceeding where he or she meets with the bankruptcy trustee and any creditor who opts to attend. In Chapter 13 proceedings, a petitioner may be required to attend a hearing for review of the proposed reorganization plan.
Bankruptcy eliminates all debt
Bankruptcy is often an excellent solution for certain debtors; however, it does not cure all debts. Certain “secured” creditors who have a mortgage or lien on property for loan collateral purposes remain collectable, as do child support, student loans and other types of debt specified in federal bankruptcy law.
These and many other common misconceptions often confuse debtors nationwide who are contemplating bankruptcy. The qualified bankruptcy attorneys can answer your bankruptcy-related questions to help determine if this is the right option for you. Contact the attorneys at BK Lawyers LLC for your free initial consultation.