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Get the facts about chapter 7 bankruptcy before you dismiss it

On Behalf of | May 17, 2022 | Chapter 7

Have you ever heard someone claim that you can only file for bankruptcy once in your life? If so, you have heard a common myth that many people believe. You can file a chapter 7 bankruptcy multiple times if you continue to experience financial hardships.

The myth above is one of the many misconceptions that keep people from seeking debt relief through bankruptcy. If you want to take control of your debt, make sure you understand chapter 7 before discounting it as a solution.

More myths to disregard

Another pervasive myth surrounding bankruptcy is that you will never be able to acquire credit after you file. On the factual side of this statement, you can probably get a new credit card or even a home mortgage sooner than you expected after your bankruptcy.

  • Spend freely before filing with no consequences.
  • Known as presumptive fraud, overspending right before filing bankruptcy can place you in legal hot water.
  • Chapter 7 bankruptcy eliminates all debt.
  • It eliminates most of your debts, but it cannot address student loans, child support or alimony obligations.
  • Chapter 7 cannot help with tax debts.
  • You can get your tax obligations reduced or discharged (sometimes) in chapter 7, especially if your tax debts are quite old.
  • You will lose all you own in a bankruptcy filing.
  • Under Pennsylvania exemption laws, some of your assets are exempt from bankruptcy, such as your retirement accounts and current wages. You also have a $300 wildcard exemption for use in keeping possessions that you would otherwise lose.

Let go of those myths if you are serious about eliminating as much of your debt as possible. Learning more about chapter 7 bankruptcy can help you find the ideal debt relief remedy for your unique circumstances.