Frequent Misconceptions Regarding Bankruptcy in NYS | What to Know

Nobody wants to imagine the day where they have to file for bankruptcy, however, oftentimes, bankruptcy is simply the best option available, though many people do not see this, as there are various misconceptions concerning bankruptcy in New York State. Continue reading and speak with our experienced Rockland County bankruptcy attorney to learn about these misconceptions, why they are false, and how our firm can assist you.

Common Bankruptcy Misconceptions in New York State

Below are some of the most common misconceptions our firm hears from clients regarding bankruptcy in New York State.

  • You will have to pay off all of your debts before you file for bankruptcy. This is downright false. Bankruptcy is designed to help those in debt get back on their feet again. While it is best to pay off any debts that you physically can at any point, the truth is, if you are currently unable to pay off your debts, and you know you will be for five or more years into the future, you can rest assured that in most cases, bankruptcy is your best option (without having to pay off debts beforehand).
  • You will lose your home. This is another very common misconception surrounding bankruptcy in New York State. When you file for bankruptcy, it will immediately trigger an automatic stay, preventing creditors from all collection activities and allowing you to stay in your home. Further, you can actually keep most of your assets when filing for bankruptcy as well.
  • Both spouses will have to file for bankruptcy. This is also untrue. Just because you are married does not mean that you share liability for all debts when it comes to filing for bankruptcy. If only one spouse is in debt, then that spouse may file for bankruptcy on his or her own without affecting his or her spouse financially.
  • You will no longer be allowed to secure a line of credit. While it is true that filing for bankruptcy will hurt your credit for a period of time, you should be capable of securing a line of credit far quicker than you may think. There are various options available, and our firm can walk you through them to help ensure you are in solid financial standing after filing.
  • Filing for bankruptcy may result in criminal penalties. Unequivocally false. You absolutely cannot go to jail for filing bankruptcy. Bankruptcy is 100% legal and is ultimately the best tool available for providing individuals and their families a path out of debt.

Contact our experienced New York firm

Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.