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Common bankruptcy myths should not be a deterrent to debt relief

Various recent surveys found that approximately 50 percent of U.S. citizens have savings accounts containing less than $1000 and that an unforeseen emergency expenditure of just $400 would be almost impossible to pay. With so many people in dire financial straits, it is no wonder that many in New Jersey and across the country turn to bankruptcy. Yet despite the financial relief that bankruptcy can offer, some individuals hesitate to take advantage. This may be due to some common – and false – myths about the bankruptcy process.

Many people fear that bankruptcy will mean the loss of all of their belongings. While Chapter 7 bankruptcy – generally considered the quicker and easier type – does mean a trustee will sell some assets to distribute the profits to creditors, there are items that are exempt, and an attorney can offer insight. With Chapter 13 bankruptcy, debts are reorganized into a manageable payment plan, often protecting against the loss of a home or vehicle.

Another fear that might prevent individuals from exploring bankruptcy options is the belief that it will completely and permanently destroy their credit. While it is true that successfully filing for bankruptcy remains on an individual's credit score for up to 10 years, it may help to realize that bankruptcy usually does not cause an individual's credit score to fall any lower than it already has. Generally, if debts are so high that bankruptcy is necessary, a person's credit score is likely low already. While there is no quick fix for improving credit score, there are ways – such as a secured credit card – to rebuild credit after the fresh start that a successful bankruptcy filing provides.

Finding an attorney who specializes in bankruptcy proceedings in New Jersey can be especially important. Lawyers with experience in both Chapter 7 and Chapter 13 filing procedures will be able to offer valuable insight and guidance into how to proceed and which approach is best for each individual's personal situation. With the counsel of a knowledgeable lawyer, a successful bankruptcy filing can offer relief from months or even years of financial and mental stress caused by the burden of debt.

Source: wtsp.com, "Confessions of a bankruptcy attorney: What people get wrong about bankruptcy", Jeanette Kazmierczak, March 24, 2017

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Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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