Many Ohio residents have a very tight budget, and it may take only a single financial emergency to send them on a path the bankruptcy. People who are considering filing for bankruptcy should be aware of the myths that surround the legal procedure.
Filing for bankruptcy does not automatically mean that the debtor will lose all of his or her property. Chapter 13 does allow debtors to retain their assets. Debtors who qualify for Chapter 7 will be appointed a trustee who will sell their assets and pay the creditors with the profits. Depending on the state in which the debtor resides, items such as vehicles or homes may be exempt. Chapter 13 allows debtors to devise a payment plan based on their income level to repay their creditors, and in most circumstances, ownership of one’s vehicle and home can be retained.
Even though a bankruptcy will remain on a debtor’s credit report for seven to 10 years after filing, it allows the debtor to begin rebuilding his or her credit without being hampered by significant debt. The filing of bankruptcy will typically not cause a lower credit score, as it is already low due to being behind on payments.
It is also possible to be approved for new credit again after successfully completing bankruptcy. It is advisable to use a secured credit card to begin rebuilding credit if people are unable to be approved for a card that has a reasonable interest rate.
Individuals who have significant debt may speak with a bankruptcy attorney about their options. The attorney may evaluate a client’s financial circumstances and determine if their steady stream of income may qualify them to file for Chapter 13 that would allow them to obtain debt relief and stop foreclosures while retaining ownership of their property.