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Don't believe everything you hear about filing for bankruptcy

Misinformation can prevent people in need of debt relief to avoid exploring every option at their disposal. This is especially true when it comes to bankruptcy. Every Washington resident who dismissed the idea of filing for bankruptcy protection based on something they heard should be cautioned not to believe everything they hear.

For example, some Washington residents might have been told that they could lose all of their property. This is simply untrue. The U.S. Bankruptcy Code and Washington bankruptcy laws allow for individuals to retain certain property up to a maximum dollar amount. In many states, including Washington, a filer has the choice of whether to choose the federal or state exemptions. This decision depends on which one will provide retention of the most property.

Many people are also under the impression that no one would ever extend credit to them again. Fortunately, that is not the case. The interest rates may be higher and the credit limits may be lower in the beginning, but as time passes, individuals will be able to obtain credit again. People who received a discharge and have a bankruptcy on their credit reports have even been able to buy homes after a certain amount of time has passed since the discharge.

Several more myths about bankruptcy exist, but knowing that these two are false might help some readers reconsider this valuable debt relief option. It would be worth an individual discussing his or her financial situation with an attorney to determine if it is the best option and to address any other myths surrounding the process. If so, it would not be advisable to attempt the process alone since it is paper intensive and has numerous deadlines, and mistakes can cost a filer the clean slate for which he or she is looking.

Source: bankrate.com, "12 myths about bankruptcy", Accessed on Dec. 7, 2016

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