When your debts become much greater than your capacity to make payments on your bills, it is time to start looking over your available options for relief. Filing for Chapter 7 bankruptcy is a very effective method for getting one’s finances in order.
Although bankruptcy is a proven method for helping people get out of debt and on the road to financial recovery, myths still abound that may impede an individual from taking the step. One of the most insidious myths is that filing bankruptcy will harm a person’s financial future by ruining his or her personal credit rating.
In fact, it is possible to see a marked improvement in your credit rating within a short period of time after a filing. This assertion is backed up by a report issued by the Federal Reserve Bank of Philadelphia. Using data culled from the Equifax credit bureau regarding Chapter 7 bankruptcy, the report stated that those filing in 2010 had their credit ratings jump by over 80 points on average. This increase took place around six to eight months after filing.
Another powerful myth is that by filing bankruptcy, a person will lose all of his or her assets. Again, this is a misguided belief. A Chapter 7 bankruptcy typically allows you to keep your possessions. For one thing, there are items that are considered exempt because they are vital for day-to-day living. Additionally, creditors simply don’t have any interest in the remainder of your belongings.
In addition to the benefits mentioned above, Chapter 7 will typically allow for the discharging of medical, credit card and personal loan debts. So if you have been afraid of bankruptcy due to misinformation, you may want to take a closer look at how Chapter 7 could improve both your personal and financial well-being. A Louisiana bankruptcy attorney could examine your circumstances and make recommendations regarding your best options.