Richard J. Shurtz, Attorney at Law

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Despite misconceptions, bankruptcy offers powerful remedies

What causes a person or married couple to consider the bankruptcy option in Washington for debt relief? Unexpected layoffs, job loss, medical expenses, divorce and disability are just some of the causes that put innocent, good-intentioned people in the position of considering bankruptcy. The strange thing is that many persons dismiss the idea because they believe some of the misconceptions widely disseminated about bankruptcy.

One thing that scares many persons is the stigma of being seen as a "deadbeat." That is incorrect and far from the truth, as the foregoing causes of financial problems have nothing to do with borrower's fault. Furthermore, there have been so many millions of consumer bankruptcy filings in the past three decades that it is almost impossible to not know someone who has used this remedy from the federal government for what it is worth.

The misconception of destroyed credit also turns people off, but for most people it is not true. When all is said and done, statistics show that those who have finished their bankruptcy successfully can usually get a mortgage within two years and even sooner for an automobile loan. It takes some hard work to focus on repairing credit but with that effort the results will be rewarding.

People think that because the bank has filed a foreclosure action that they must move out of their home. This is only true in a small percentage of cases where the backed-up debt is huge and has accumulated for many years. Otherwise, an individual or married couple can file a Chapter 13 and enter into a payment plan on the arrearages while paying the regular monthly payment on time each month.

Bankruptcy for some residents of Washington and elsewhere conjures up visions of the banks coming and hauling all of one's personal belongings away. There are, however, exemptions under law that allow people to keep all or most of their property. If a person wants to turn in a home or a car and get rid of all outstanding debt attached to the property, this is easily done and all debt on the property is wiped out.

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