There are many myths about bankruptcy. Bankruptcy often has an aura of difficulty and confusion. We are here to tell you about the facts!
For starters, bankruptcy courts are located all over the United States. Contrary to popular belief, bankruptcy is actually filed and handled in federal court and bankruptcy is based off of federal law.
Filing for bankruptcy actually calls for an appearance in court and is more than just filling out some legal documents. There are two main types of bankruptcies that individuals may be able to file: Chapter 7 and Chapter 13. The type of bankruptcy that you may be able to file is, in part, based off of your median income.
Bankruptcy does not always mean that all debt is forgiven. Some debts, such as tax debts and mortgage arrears cannot be discharge but can be included in a Chapter 13 plan payment. The Chapter 13 plan payment is typically based on what you owe, how much you owe, and how much money you earn. In Chapter 7 bankruptcy, there is no monthly plan payment but you also may still owe many tax debts and/or mortgage arrears.
After filing bankruptcy and having your debts discharged, you may be able to purchase a house after three years with an FHA loan. In addition, our bankruptcy clients typically are approved for car loans right after the bankruptcy is discharged. If you would like more information about bankruptcy and its implications, call Wright Law Offices at 602-456-6085.
Source: Enlighten Me, “Top 10 Facts About Bankruptcy Law,” 2015.