If you, like many residents of Tennessee, are finding it increasingly difficult to stay on top of your finances, you may be seeking solutions that could potentially help you get your life back on track. Bankruptcy, for example, is one method many people consider when they seek a fresh financial start, but there is a lot of misinformation out there about it that can prevent some people from taking the first step. At McElroy & Associates, we recognize that there is a lot of common misconceptions out there about the bankruptcy process, and we have helped many clients separate fact from fiction and find solutions that meet their needs.
Per Nerdwallet, one of the most common misconceptions about filing for bankruptcy is that, in doing so, you must acknowledge some sort of personal failure. Bankruptcies have become increasingly common, however, for two primary reasons. First, the majority of people who file for it are struggling with overwhelming medical debt. Second, wages are not rising alongside medical deductibles, leaving many hard-working Americans with limited options.
Another common misconception about filing for bankruptcy is that paying off debts is always a better option. Ultimately, this comes down to how much debt you have, and whether you can expect to pay it off within a reasonable timeframe. If your debts are so considerable that paying them off within five years is decidedly unrealistic, bankruptcy may help you find relief faster.
A third prevailing misconception about bankruptcy is that, by filing for it, you will lose your home, your car and everything you value. In most situations, though, this is not the case. In a Chapter 13 bankruptcy, you typically keep your assets, but you may have to pay back a part of their worth. In a Chapter 7 bankruptcy, you may be able to save your car and the like by designating them as exemptions. Find out more about bankruptcy on our web page.