More of those Arizona Bankruptcy Myths Part II:
In Part I of this feature we explored three common bankruptcy myths. Here we explore a few more common bankruptcy myths that are floating around online.
Bankruptcy Myth #4: It is simply just too expensive to file for bankruptcy. I won’t be able to afford it.
In reality, you really can’t afford NOT to file for bankruptcy. While you may think that you lack the necessary funds to file for bankruptcy right now, your Arizona Bankruptcy Attorney can show you how you can free up enough money to file for bankruptcy. In fact, one of the advantages of Chapter 13 bankruptcy is that it allows you to pay many of your fees over the life of your plan. Also, many Attorneys are willing to work out a type of payment plan. Think about it! In the end you may have to spend several thousand dollars to file for bankruptcy, but you will finally be able to get out from that mountain of debt that could be $20,000; $40,000; $60,000 or more.
Bankruptcy Myth #5: I have to qualify in order to file for bankruptcy. Unfortunately, not everyone qualifies.
While it is true that you have to meet certain “income” tests in order to file in certain bankruptcy chapters, everyone qualifies for at least one chapter under the bankruptcy code. Thus, the real question that we need to answer is not IF you qualify for bankruptcy, but under what chapter you qualify. In general, if your household income is below median for your state and family size you automatically qualify for Chapter 7. If your household income is above median, you will have to undergo an addition “means test” which measures the amount of income you make in relation to your overall debt. In order to qualify for Chapter 13 you cannot have debt that exceeds certain limits. However, these limits are so high that most people who don’t qualify for Chapter 7 qualify for Chapter 13. Finally, if for some strange reason you don’t qualify for either Chapter 7 or Chapter 13, you can qualify under Chapter 11. In all chapters you will still obtain a discharge on your debts.
Bankruptcy Myth #6: My finances have to be a total mess and creditors must be calling before I file for bankruptcy.
This is completely false! Under the law, you are legally allowed to file for bankruptcy at any time. While you may want to postpone filing for bankruptcy for many financial reasons, there is no need to wait until creditors are hounding you daily. In reality, you do not have to wait until you are completely stressed out. A proper consultation with an Arizona Attorney can start you on the road to proper planning and can help you avoid lawsuits, judgments and garnishment of your wages.
For more information about bankruptcy, contact our firm of Arizona Attorneys today. Our lawyers will be happy to speak with you.