Bankruptcy is one of the best ways to gain back control of your finances whether you have become ill, lost a job, or just become overwhelmed by debt. Unfortunately, most people do not fully understand the process or what the filing process actually entails. If you are considering bankruptcy, here are a few surprising facts you may want to know.
You're Not the Only One
Most people do not like discussing money or finances, so you may not sit around with your friends and family to talk about how well or not well you are doing financially. In the past, having the need for filing bankruptcy had a negative connotation attached to it. If you need to file, you may feel embarrassed or like you have failed in life.
Fortunately, you are not the only one who has had the need to file bankruptcy. While surprising to hear, there were 794,960 bankruptcy filings in 2016 alone. Even though others may not talk about it, you should know that you are not alone.
You Can Probably Keep your Home
Having the ability to buy a home is a huge accomplishment, so it is easy to see how losing the ability to pay for the home can be incredibly devastating. If you have become overwhelmed by basic living expenses and debt due to the loss of income or another situation, do not worry too much about whether or not you will lose your home. If the foreclosure proceedings are starting or there is a fear they will start soon, filing bankruptcy is a smart decision.
Ask your bankruptcy lawyer if you and your situation qualify for a homestead exception. This ensures you will be able to keep your home while diminishing or designing a repayment plan for your other debts.
Some Debts Can't be Discharged
Finally, you may be shocked to know there are some debts bankruptcy can't discharge. This means you will still be responsible for paying these debts even after filing bankruptcy.
Each case is different, but bankruptcy will not discharge child support and alimony, fines and payments that must be paid because you broke a law, and certain tax debts.
Many people have student loans that they wish to have discharged in bankruptcy, but the ability to discharge these debts will depend on the court's decision. In addition to student loans, regular income tax debt may not be discharged unless the courts give special permission.