As we noted in our article 5 Things We Want You to Know About Bankruptcy, choosing to file for bankruptcy is a difficult decision, which is further complicated by the bankruptcy misinformation that is commonly believed. Only when you have the facts and understand what bankruptcy can and cannot do for you, will you be equipped to decide whether bankruptcy is the right solution to your debt problem.
We have been practicing bankruptcy law for over 35 years. Over the decades, at nearly every free consultation with a prospective client, we clear up misinformation about bankruptcy. Based on our experience, the following are 5 More Things We Want You to Know About Bankruptcy.
- Retirement funds are protected in bankruptcy.
Do not borrow against your retirement funds to pay back debts in an effort to avoid filing for bankruptcy.
In general, retirement accounts are protected in bankruptcy. You will be able to keep all of the funds in your qualifying retirement accounts and erase your debts through bankruptcy. In Georgia, your 401(k), 403(b), and pension are protected. Most retirement plans that have a penalty for early withdrawal are exempt (protected).
- It is likely that you will be able to keep your house and your car through bankruptcy.
So long as your car and house do not have too much equity, and you can reasonably afford to make the monthly payments, then it is likely that you will be able to keep your car and house through bankruptcy.
Cars and houses are secured debts, which have specific and complex rules in bankruptcy. To learn about what your options are regarding your car or house, contact us at (912) 351-9000 for a free consultation. We are available to review your situation and give you legal advice specific to you and your debt relief needs.
- Certain types of debt cannot be erased through bankruptcy.
While credit card and medical debt are dischargeable and erased through bankruptcy, some types of debt are nondischargeable and cannot be erased. The U.S Bankruptcy code lists exceptions to discharge. The most common nondischargeable debts are student loans, spousal or child support arrears, and recent tax liabilities.
- Filing for bankruptcy will impact your credit score―but maybe not as much as you think.
Your credit score will decrease after filing for bankruptcy, but many debtors are surprised by how quickly their score begins to improve after a bankruptcy.
After bankruptcy, many people are able to get loans, lines of credit, and credit cards (though we caution you to be careful and avoid falling back into debt after bankruptcy). The loan terms and interest rates may not be favorable right out of bankruptcy, but will continuously improve over time so long as bills are paid on-time, every month.
A Chapter 7 bankruptcy will report on your credit report for 10-years from your filing date, and a Chapter 13 bankruptcy will report for 7-years after your filing date.
- If you do not tell people about your bankruptcy case, they are unlikely to find out about it.
While bankruptcy filings are public records, a person would need to know how to search public records and be searching for your name to find out that you filed for bankruptcy.
There are a few caveats:
- A bankruptcy filing may show up in a future background check for employment, especially if you apply for a job in the financial sector. It will not appear in a criminal background check but will appear on your credit report which may be pulled in a more in-depth background check.
- Jobs that require a security clearance may be affected by filing bankruptcy. An employer reviewing you for security clearance may be alerted to your bankruptcy. Also, in some cases, you may have a duty to disclose a bankruptcy filing.
- If your wages have been garnished then your employer will be notified of your bankruptcy filing so that the wage garnishments will stop.
Are You Struggling with Debt?
Here at the Law Office of Barbara B. Braziel, we help people get out of debt. We are the premier bankruptcy law firm in Savannah, GA and we practice exclusively in bankruptcy law. Our experienced attorneys are committed to ensuring you understand the protections and benefits of bankruptcy and how filing will affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you to get to know us here and read about the clients we’ve helped here.
Call us today at (912) 351-9000 or contact us to schedule a free consultation.
Find out more about Bankruptcy in our guide: All About Bankruptcy
We proudly serve the 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.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.