Avoid Bankruptcy And Eliminate Debt – The Best Alternatives To Bankruptcy

Avoid Bankruptcy And Eliminate Debt The Best Alternatives To Bankruptcy

There had been a spike now in the number of people who are filing for bankruptcy. This is probably spurred on by the economic crisis and the large number of families that had been affected by it. In fact, you yourself may even be considering filing for one because of some combination of circumstances and financial issues.

Before you head over to the proper financial authorities to file your bankruptcy, it may be wise to read up on some of the common misconceptions about it. You may find out some false information about what you thought you knew about how filing for bankruptcy would affect your current situation. Some common misconceptions about bankruptcy would include:

Filing for bankruptcy means you do not qualify for loans or other credit in the future:

This is actually a common misconception. Many think that once they have filed for bankruptcy, then they would not be able to loan any money anymore. This is a misconception because the truth is that you would still be able to get a loan in the institutions but with additional considerations.

The considerations would usually range from only being able to loan a small amount or having to pay in a shorter amount of time. Also, the bankruptcy filing is not really a permanent mark on your credit records. It would last up to 10 years, so you could file for a loan again after the time has passed.

You have to have to be completely out of funds to file for bankruptcy: Many think that bankruptcy only becomes their option once they are flat broke or are completely out of funds.

Actually, you can already file for bankruptcy even if you have still have some properties or cash. The state of New York for example, actually allows up to $2,500 in cash, funds in a qualified 401(k) plan, and even equity in cars.

Of course, the law varies from state to state so you should check on how the state that you are currently residing in qualifies bankruptcy.

Now that you have cleared up some of the misconceptions that you may have regarding bankruptcy, you should now consider your options better and see if it is truly suitable for your current financial situation.

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