Bankruptcy and common myths, part 2

The newly enacted Bankruptcy Abuse and Consumer Protection Act has a good number of persons with debt woes confused about how the new law may affect them personally. Monetary professionals doubt that the new debt relief law will assist people with financial problems; up until now it looks like a much better law for the lenders or creditors than for the debtors. Bankruptcy legislation revisions have been calculated to make it more challenging for the casual consumer to file for debt relief through the courts, but were supposed to continue to be able to aid people who really need it.

Below are a few of the myths and misconceptions in regards to personal bankruptcy.

Can the court eradicate all personal debts?
 
No. Some types of debt are exempt from relief. Student loans may not be erased; they have to be repaid. On the other hand, the rates of interest for college loans are low, so the strain is substantially less than for other types of debt. You have to continue to pay child support, student loans or taxes of any kind.
 

Can you file for bankruptcy as often as you want?

Debt relief applications are limited and do have long term consequences. There is a price to be paid for filing for bankruptcy, and debtors with debt problems should not take a debt relief filing lightly. A bankruptcy filing will remain on your credit report for a decade. Filing for debt relief may make it harder to obtain substantial credit, such as for a car loan or a home loan. Current law permits you to file for Chapter 7 debt relief, which relieves most personal debts, only once every 6 years.

Can someone lose your job for a bankruptcy filing?

No, you cannot be terminated from your job for filing; that is illegal. The law does permit employers to run credit reviews on would-be new employees, and having a court filing on your credit record does not do you any favors when it comes to obtaining a job. Pre-employment credit screening is great reason for trying to put off applying for debt relief at all. If you don't have a job, you can't pay your debts. Those who rent may not be aware that a lot of property managers conduct credit checks on possible renters. If you are considered to be a risk for paying your rent, you may find yourself unable to secure a place to live or work.