Chapter 7 Bankruptcy Myths Explained by Checkett, Pauly, Bay & Morgan, LLC

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Chapter 7 bankruptcy is a tough choice for anyone to make. You want to keep the possessions that you’ve worked so hard to get. But the mounting bills and life circumstances are making it increasingly difficult for you to make ends meet. What do you do? Chapter 7 bankruptcy is one option.

Today’s blog from Checkett, Pauly, Bay & Morgan, LLC, explains some Chapter 7 bankruptcy myths. 

Related Post: Bankruptcy Attorney FAQs

Myth 1: You Will Never Get Credit or Loans Ever Again

At worst, you’ll get limited credit or loan opportunities for seven to 10 years after you file for bankruptcy. But you may actually receive new credit card offers in the mail. These credit cards will be secured, meaning you’ll need to use a bank account to secure the loan. If you have $200 in your savings account, that may be enough for a secured credit card. Account limits may be lower than the actual secured amount.

To rebuild your credit, don’t max out the card every month. Pay off the amount you borrow in full every month to start building your credit over time. Eventually, you’ll get some of your good credit back.

Myth 2: Chapter 7 Bankruptcy Filers Are Completely to Blame for Their Circumstances

Reckless spending has very little to do with Chapter 7 bankruptcy filings. Mounting medical bills, unemployment, the COVID-19 pandemic, and changing economic times are all reasons people file Chapter 7 bankruptcy. 

Many people avoid filing for Chapter 7 bankruptcy protection because they feel guilty or don’t want to admit they made a mistake. This couldn’t be further from the truth. Filing for bankruptcy is a chance to start over and protect your family. Bankruptcy laws are in place for a reason, and this type of filing can help you.

Myth 3: You’ll Lose Everything in Chapter 7 Bankruptcy

Yes, you may have to give up some of your possessions in Chapter 7 bankruptcy. Because everyone’s situation is unique, Checkett, Pauly, Bay & Morgan, LLC, can look at your finances to see if this filing is the right choice for you.

The good news is that you won’t lose everything in Chapter 7 bankruptcy. Missouri lists many exemptions that creditors can’t repossess in bankruptcy. You can keep up to $3,000 in household furnishings, $3,000 for tools of the trade for your job, $1,500 in firearms, and $1,500 for a wedding ring. You can exempt equity up to $3,000 for your vehicle. If your vehicle is worth less than $3,000, you may get to keep it.

You can exempt $15,000 in equity in your principal place of residence. If you have put less than $15,000 in equity into your home, you may get to keep it. Again, the attorneys at Checkett, Pauly, Bay & Morgan, LLC, can examine your financial situation to see what may or may not happen during a Chapter 7 bankruptcy filing.

Chapter 7 Bankruptcy Attorneys at Checkett, Pauly, Bay & Morgan, LLC

The experienced bankruptcy attorneys at Checkett, Pauly, Bay & Morgan, LLC will explain your options based on your unique financial circumstances. Contact Checkett, Pauly, Bay & Morgan, LLC, or call (417) 358-4049 for more information on Chapter 7 bankruptcy. The first consultation is free.