Five Common Chapter 13 Bankruptcy Myths

Although Chapter 13 bankruptcy is not the most widely used bankruptcy option, it is preferred by many homeowners that are on the verge of losing their homes. Under a chapter 13 bankruptcy, single or married consumers are allowed to propose a three to five year repayment plan, during which time they can bring their past due mortgages current and keep their homes. As more people learn about the benefits of bankruptcy, the filings increase nationwide…but unfortunately, the misconceptions and myths increase too. Below we’re going to take time to clear up 5 common myths that are circulating about the chapter …

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Bankruptcy Myth: My friend filed Chapter 7. I can too.

“My neighbor filed for Chapter 7 bankruptcy and was approved. I’m sure I will be approved, too.” This statement is false. In order to qualify for Chapter 7 bankruptcy, every debtor must undergo a “means test.” The means test will compare your family’s median income to that of other families in your state. If your income falls below your state’s median income, you can file for Chapter 7 bankruptcy relief. If your income is above the median income for your state, you cannot file for Chapter 7 bankruptcy. Contact the Philadelphia Bankruptcy Lawyer to discuss other debt relief options.

Bankruptcy Myth: Chapter 7 is the Best Bankruptcy Option

This statement is totally subjective. Chapter 7 bankruptcy is likely the most widely used of all bankruptcy options. With that said, this does not necessarily mean that Chapter 7 is the best option for you. Whether or not Chapter 7 is ideal for you depends, in large part, on your personal debt and assets. It is best for you to consult an attorney prior to making a decision as to which bankruptcy option is best for you.