There is a lot of misinformation that gets passed around regarding bankruptcy. Since there is still a stigma attached to filing bankruptcy, the myths, misinformation, and blatant falsehoods about bankruptcy do not often get questioned. If you are drowning in debt and considering your options, here are 3 facts about bankruptcy.
Bankruptcy erases most debts
While not all types of debts are erased through bankruptcy, most debts that people have are erased. Bankruptcy erases credit card debt, medical debt, personal loans, certain older tax debts, and other types of loans that were given without a collateral requirement.
Bankruptcy law allows you to keep your assets and personal belongings valued up to a certain dollar amount. So long as your assets are not worth more than the amount you are allowed to keep under the bankruptcy exemptions, then you can keep your assets.
Georgia law allows for exemption amounts for your house, cars, jewelry, household goods, and other belongings. Also, ERISA qualified retirement accounts are fully protected through bankruptcy.
The purpose of bankruptcy is to give you a fresh financial start, not to financially ruin you by taking your assets and the things you own.
Even high-income earners can qualify for bankruptcy
There is a misconception that people who have high incomes cannot file for bankruptcy. This is not true. People who earn more money than their state’s median income, adjusted for household size, must run the means test to determine if they qualify for Chapter 7 bankruptcy relief. The means test is a review of income minus allowable expenses. If someone truly does not qualify for Chapter 7 bankruptcy, then relief under Chapter 13 bankruptcy may be an option. Chapter 13 creates a debt repayment plan that lasts for three to five years.
People who earn less than their state’s median income automatically qualify for Chapter 7 relief.
Savannah Bankruptcy Attorney
The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.
Find out more about Bankruptcy in our guide: All About Bankruptcy.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.