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What are some bankruptcy myths?

Bankruptcy can be a confusing process. Even if you think you know everything about it, there may be things you think you know that are actually not true. There are many myths out there about this process. Not understanding the truth about it can cause you issues if you are deciding whether to file in Virginia.

One top myth, according to Nerdwallet, is that it is better to pay off your debts than file bankruptcy. This is bad to believe because you could end up causing yourself more financial trouble if you try to pay off debt when you really cannot afford to do so. In the long run, bankruptcy may be the better choice. You just have to look at your specific financial situation to determine what is best for you.

Another myth is that you will lose all your assets. Again, this is not true. You can keep anything that is exempt, which includes a home and vehicle. You also usually can keep all your personal possessions. You may lose some assets, but you will not lose everything.

Finally, one of the most prevalent myths is that bankruptcy erases every debt. There are actually many types of debt that bankruptcy will not get rid of. These debts include student loans and support obligations. You also cannot wipe out tax obligations through this process. So, if your debt mainly consists of these expenses, then filing may not be a good choice.

Making the choice to file bankruptcy is huge. You have to look at your situation and consider what the process can do for you. This information is for education and is not legal advice.

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