Florida residents who are overwhelmed by debt are often searching for the best debt relief solution. Many will fail to consider Chapter 7 bankruptcy, however. This is largely because of the amount of misinformation surrounding the process and the rights of filers.
A Chapter 7 bankruptcy is called a “liquidation,” which can immediately put Florida residents off when it comes to filing. People believe that they will lose all of their property and it will be sold to pay creditors. However, that is not the whole truth. In reality, most debtors will be able to keep a substantial amount of their property when the proceedings are concluded. This is due to numerous property exemptions allowed under the U.S. Bankruptcy Code or Florida’s bankruptcy laws.
People are also concerned that their credit will never recover. This too, is untrue. What is true is that the bankruptcy will have an impact on a person’s credit score and will remain on his or her credit report for approximately 10 years. However, under ordinary circumstances, the majority of filers who receive a discharge are able to obtain credit approximately 18 months later. Interest rates will most likely be higher, but rebuilding credit is possible.
Filing for Chapter 7 bankruptcy provides many people with the fresh financial start they need. Thereafter, they can work to rebuild their financial lives knowing that they are no longer responsible for many of the debts that caused the financial crisis that precipitated the filing. In order to obtain the best possible outcome to the bankruptcy, it would not be advisable to enter into the process alone.
Source: fool.com, “4 bankruptcy Myths — Debunked“, Maurie Backman, July 30, 2016