DISSOLVING THE PREVALENT BANKRUPTCY MYTHS
More than enough people’s jobs and companies in Orlando and across the state have been lost because of the COVID-19 outbreak. Accordingly, it’s not surprising that a growing number of Floridians are contemplating bankruptcy as a means to wipe off their debt and start over financially.
Many individuals still have doubts about bankruptcy, and it’s typically because they buy into some of the most pervasive fallacies about the process. Many people have false beliefs about bankruptcy that prevent them from filing or cause them to delay doing so. In light of this, our Orlando bankruptcy attorney has listed the most common misconceptions about bankruptcy and the facts surrounding them.
If you are considering filing for bankruptcy, consider taking help from a lawyer.
If I file for bankruptcy, I will lose everything.
In accordance with Article 1 of the US Constitution, the central government has the power to impose national laws nationwide. Still, that’s not a necessary condition. Bankruptcy law is an area where the federal government has deferred to state authority. Bankruptcy exemption laws are one of the aspects of bankruptcy law that individual states have the freedom to alter. The list of exclusions Florida recognizes is long and includes:
The bankruptcy laws do not apply to a homestead, no matter how much the property is worth. If the mortgage on the residence has been paid off within the preceding 1,215 days, this rule does not apply. In that instance, the first $160,000 or so of home equity is not subject to taxation.
Exclude up to $1,000 in automobile equity.
If you own your own home, you can exclude up to $5,000 worth of personal property from taxation; otherwise, the limit is $1,000.Exempt assets from this rule include retirement accounts up to $1,000,000.
As you can see, even if you file for Chapter 7 bankruptcy in Florida, you will not lose any of the aforementioned assets.
Declaring bankruptcy will have a devastating effect on my credit.
A bankruptcy will, indeed, have a negative effect on your credit score. You’ll have a Chapter 7 bankruptcy on your record for ten years. You’ll have a Chapter 13 bankruptcy on your record for seven years if you file. However, if you’re looking at bankruptcy, it’s safe to assume that your credit is already in bad shape. Bankruptcy also gives you a clean slate upon which to begin reestablishing your credit.