Chances are that you have heard many of the myths  of filing for Bankruptcy and half-truths floating around concerning the bankruptcy process in Oregon. One of the misconceptions we encounter most frequently concerns eligibility for the Chapter 13 process. Here at Northwest Debt Relief Law Firm, we believe that there is a best-case debt relief option available for every situation. For you, even if you are representing a business, that option could potentially include Chapter 13.

You’ll lose everything

You may think filing for bankruptcy means giving up your house, car and any other assets you may have. In fact, you’re likely to keep a lot of your possessions.

The vast majority of Chapter 7 cases are no-asset cases, meaning the debtor gives up no possessions. There are two reasons for this. First, you can carve out some basic assets, called exemptions, that are necessary for day-to-day life. What you can exempt varies from state to state, so be sure to discuss exemptions with your bankruptcy lawyer. And for your possessions that aren’t covered under exemptions? Well, the creditors likely don’t want them.

Under Chapter 13, you keep all of your assets, but the value of them figures into your repayment plan.


All of your debts will be relieved

Both Chapter 7 and 13 will provide you relief from most forms of debt, but there are some exceptions. As a general rule of thumb, in bankruptcy cases you cannot discharge, or have forgiven, debts that you are deemed personally responsible for.

Student loans are another type of debt that is unlikely to be forgiven.

Generally, you can discharge debts from personal loans, credit cards and medical bills, among others. Your bankruptcy attorney will help you understand which debts will be affected.


Paying off your debts is a better option

Filing for bankruptcy is one of the most serious financial decisions you can make, but that doesn’t mean it’s a bad idea. In fact, filing for bankruptcy may be the best option for you.

If your debts are more than 50% of your annual income and you see no way to pay them off within five years, bankruptcy is likely your best path toward living debt-free.


Filing for bankruptcy is a personal failing

Given that roughly 57% of bankruptcies in 2009 were a result of medical bills and that over the past decade the cost of medical deductibles has grown seven times faster than wages have risen, many bankruptcies are likely the result of stagnant wages rather than poor financial management.

Whatever your reason for pursuing this form of debt relief, think of bankruptcy as a tool that can help you take control of your finances.


Bankruptcy will ruin your financial future

There’s no way around it: You can expect to have limited access to credit and to pay higher interest rates for the seven to 10 years that a bankruptcy remains on your credit report. But your credit score is actually likely to rebound shortly after you file for bankruptcy.

A report from the Federal Reserve Bank of Philadelphia, using data from credit bureau Equifax, showed that those who filed for Chapter 7 bankruptcy in 2010 had an average credit score of 538.2 on Equifax’s scale of 280 to 850. But the average score jumped to 620 by the time those bankruptcies were finalized, about six to eight months later.

Further, there are a lot of ways to restore your credit after bankruptcy, such as getting a secured credit card. You will face some limitations, but taking advantage of the right financial products can go a long way toward helping you get on the right path for your financial future.


Schedule a Free Consultation with Your Portland Bankruptcy Attorney

When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon.  We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.

Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.


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