Looking into what can happen with bankruptcy

Looking into what can happen with bankruptcy

On Behalf of | Aug 5, 2021 | Bankruptcy |

After trying to maintain your finances and make sure that all of your essential bills are paid, you might discover that it’s too difficult to catch up on certain debts. This could lead to filing for bankruptcy in Maryland. If you’re apprehensive about beginning the process, it may be helpful to debunk certain myths about bankruptcy.

Qualification

Many people think that they won’t be qualified to file for bankruptcy unless they own nothing at all or have no income. This is far from the truth as many people have a home, a vehicle, and a steady job when they apply. If it’s difficult to pay your bills each month after trying every avenue possible, then you’ll likely qualify.

Losing your belongings

A common myth regarding bankruptcy is that you’ll lose everything you have. There are a few exemptions that an attorney may talk to you about when it comes to keeping many of your possessions. Assets that are often protected include vehicles, items in your home, pets, jewelry, and life insurance policies. In the event that you don’t make payments on a loan or on a bankruptcy settlement, then you could lose the items that are part of the collateral.

Credit

It’s important to have good credit in order to purchase things that you need and want. After filing for bankruptcy, you’ll see the information on your credit report for about 10 years. With a little work and responsibility, you can usually increase your score soon after the bankruptcy drops off your report. One thing to keep in mind about filing is that your debt-to-income ratio tends to even out since you won’t have as much debt any longer.

Bankruptcy might appear confusing or daunting at first. However, there are advantages to filing and getting a fresh financial start.