If you have been unfortunate enough to have encountered serious financial problems, you may feel as though there is no way for you to obtain a fresh start. Luckily, bankruptcy is designed to protect individuals from having these issues ruin their lives. However, this form of legal protection is often poorly understood by debtors, and if your debts have become too much for you to pay, you may benefit from having the following three myths about bankruptcy refuted.
Myth: You Have To Be Poor Or Unemployed To File For Bankruptcy
There is a common belief among some people that an individual that makes a reasonable paycheck will be denied bankruptcy protection. However, you should be aware that there are no income limitations for filing for this type of protection. While there are certain forms of bankruptcy that well-paid individuals may not qualify to file, there is a bankruptcy option for individuals of any income bracket. Only an experienced attorney will be able to determine which option is best suited for your unique situation.
Myth: You Can Accumulate Debts Just Before Filing To Avoid Repaying Them
When a person decides to file for bankruptcy, they may make the mistake of assuming that they can accumulate additional debt due to the fact that their pending bankruptcy will erase their obligation to repay it. However, you should be aware that this is a strategy that the courts are accustomed to seeing from some unscrupulous bankruptcy petitioners. As a result, the courts may be highly suspicious of any recent debts that you accumulated just before petitioning for bankruptcy protection. If the court investigates and determines that the debts were not legitimate, you may not be able to include them in your filing. This may include maxing out your credit cards for a dream vacation or luxury purchase within months of filing for bankruptcy protection.
Myth: Bankruptcy Is Only For Massive Debts
Sadly, there are some people that may not consider filing for bankruptcy because they are under the impression that this is only for discharging extremely large debts. However, there is no minimum or maximum limit on the amount of debt that you can have discharged. This stems from the simple fact that a person's ability to repay debt is relative to their income, and as such, the courts have an interest in protecting the right to file for bankruptcy for individuals with no or extremely limited incomes.
For more information, contact a bankruptcy attorney like Morrison & Murff.