Bankruptcy - People don’t get it, part 2

The the most recent court-ordered debt relief legislation has many individuals thinking about personal bankruptcy for the first time. Many debtors may not know much about bankruptcy law, so we'll take a look at a few misconceptions about the bankruptcy procedure.

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Financial counselors doubt that the Federal law will help debtors; up until now it looks like a much better law for the creditors than for the people with financial problems. The new bankruptcy legislation has many consumers with money problems unsure about how the revised statute may affect them personally. Debt relief legal code changes have been intended to make it much harder for the casual consumer to apply for debt relief through the courts, but were intended to still be able to assist those who genuinely require it.
 

Below are a few of the falsehoods and misconceptions regarding personal bankruptcy.

Is it possible to keep your home, boat, recreational vehicle or car if you file for debt relief?

Some states, such as Texas, have generous household exemptions, as long as you have resided in the house for a minimum of 40 months. Boats, cars and recreational vehicles are not exempt and will have to be sold to pay off your financial obligations. Circumstances vary under the newly enacted law; you might or might not be able to keep your house.

Filing gives you a chance for a "fresh start." Is this correct?

That is the intention, but the term can be misleading. On the downside, personal debts are noted on your credit report and the harm to your credit score will remain a black mark for up to ten years. Even if your debts are erased, a debt relief filing, can drastically damage your future ability to obtain funds for a vehicle. On the positive side, the debt relief in court process does wipe out many, if not most personal obligations.

Can those who file be fired for a bankruptcy filing?

No, you cannot be terminated from your job for filing for relief that is against the law. Federal law does let corporations to conduct credit checks on possible hires, and having a filing on your credit record doesn't do you any favors when it comes to obtaining a job. Pre-employment credit screening is great reason for working to keep away from filing at all. If you don't work, you cannot pay off your debts. Renters may not realize that a lot of landlords run credit screening on prospective tenants. If you are perceived to be a risk for paying your rent payment, you may be unable to secure a place to live or work.