There is a general misconception about how common it is. Understandably there is a big stigma surrounding chapter 7 because people do not want to feel like they are cheating their creditors or being irresponsible with their debts. Although that can sometimes be a concern, most people who I see have legitimately fallen on hard times and have been thrown into a situation that they would not be able to get out of without the help of bankruptcy, whether it is medical problems, loss of a job or something that prevents them from continuing on. People tend to feel it is not very common whereas it actually is very common. People do not talk about it because of the stigma but everyone knows someone who has done it, even though they don’t realize it because no one talks about it.
Another misconception is that a person will lose everything they owned and everything would be taken and sold. There are exemptions, and 99% of time a person would not lose anything at all, and even if they did, it would only be extraneous possessions. A person would not lose the clothes on their back or their clothes washer, their house or anything like that. It is also a misconception that people think filing bankruptcy will ruin their credit forever, whereas the truth is that a lot of times it allows a person to rebuild their credit faster than if they had not filed bankruptcy.
How Does This Work For A Married Couple?
A married couple can file jointly, although they do not have to, so it really depends on the person’s situation and whether one spouse has all the bankruptcy and all the problems with the finances while the other one has a relatively clean credit report. Someone with good credit would not want to mess it up by filing bankruptcy, so sometimes in those kinds of situations only one spouse will file and not the other one. More commonly, both spouses will have their names on their credit cards, car loans, mortgages, leases and things like that, so it goes into one single case and is consolidated because they filed jointly. It is really not much extra work than if it was being done for one person.
What Are Some Things That People Want To Be Wary Of?
Hiding assets and then filing for bankruptcy is the classic example of bankruptcy, but a person would not want to do that because it is a felony. It is very serious and it is fraud because essentially the person is hiding assets that should be available for the trustee to sell and to distribute those proceeds to creditors, so the creditors are getting the short end of the stick. This is really the main thing that trustees are concerned with finding. There could be other forms of bankruptcy fraud if a person was lying about having filed bankruptcy before, or if they were lying about some proceeds or funds that they were going to be receiving in the near future, like maybe an inheritance or proceeds of a lawsuit. If the person does not tell the trustee about that, it would be similar to hiding assets so it can also be considered fraudulent. The main point here is that the person must be sure to list all of their assets on their bankruptcy schedules and list all of their creditors and be upfront with the trustee. As long as a person does that, they should be fine.
Will My Name Be Published Somewhere If I File For Chapter 7?
The person’s name will not published in any newspaper or anything of that nature. Bankruptcy proceedings are public records, which means they are searchable by the public, so if someone wanted to know whether a person ever filed bankruptcy, they could run the person’s name through a search on a court system or at the court house and they could find out if the person had filed a petition, if it was ultimately granted or discharged or if it was dismissed. The only other people who would find out about the bankruptcy without actively looking are the people who would receive notice from the filing, which is all of the creditors. The person’s name will not be flashed across the news or anything like that and no one would know unless they actively looked for it.
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