In modern world the overall economy is very unpredictable. Even a few simple financial mistakes can result into economic doom. As a result a sharp rise has been seen in the number of bankruptcy cases being filed everyday. Bankruptcy has always been a last resort for fiscally disturbed people. Most people are not well aware of this process and it's effects. This article aims to eradicate the most common misconceptions regarding bankruptcy from your mind.
A rather ridiculous concept is that just saying the words "I am declaring a bankruptcy" in public clears all the debts of a person. You won't believe this but many people consider it to be true. This idea has probably been popularized by television shows (for instance Michael Scott in The Office did that once). In reality bankruptcy is a lengthy process that takes somewhere around six months to complete and leaves a strong impression on your whole life. For some people it takes about ten years to get back a good credit rating. So many complications can arise that people often hire professional attorneys instead of filing the bankruptcy by themselves.
Many people wrongly think that the option of bankruptcy is just for United States citizens. If you own sufficient amount of property then you can go for bankruptcy regardless of your citizenship.
Some people do not file bankruptcy because they fear that their financial situation may get worse in the future and if that happens, they won't be able to do anything because they would have already used their bankruptcy option. You should be aware of the fact that one can use bankruptcy several times during his or her life. Naturally there are some restrictions which prevent overuse. You can use a Chapter 7 bankruptcy (the type of bankruptcy in which debts are wiped out and property is liquidated) every eight years and a Chapter 13 bankruptcy every three years. If you want to go for a Chapter 13 bankruptcy after a Chapter 7 bankruptcy then you need to wait for six years. Similarly if you have already filed a Chapter 13 bankruptcy then you can file a Chapter 13 only after passage of four years.
It is not necessary for two married people to go for a bankruptcy together. If you have a lot of debt in your name then you can file a bankruptcy alone. This will not affect your spouse in any way. However if both of you are liable for the debt then it is necessary for both of you to file together. Otherwise your creditors will simply start demanding their money back from your spouse instead of you.