When one has a lot of debts to their name without a means to pay them, they may decide to file for bankruptcy. This will help them to either pay or have the debt claims discharged. Before opting for this legal procedure to deal with debts, there are some myths you need to know especially about the complex Hawaii bankruptcy procedures.
There is a belief that to file for this procedure; the debtor must be broke. The only thing that is required is for the debtor to declare that he is unable to pay his bills when they are due. If at all the debtor was broke, he would not be in a position to pay for a lawyer because he requires one for this process. The state permits the debtor to hold on to a part of his property to avoid becoming state dependent because he cannot fend for himself.
Ten years after the insolvency has been filed, the debtor can apply for credit. Many people assume that after an insolvency, the debtor will never receive credit. This is not true as the insolvency file will appear on your credit report for only ten years, after this period you can get credits. Initially, the credit offered will be very little, but it will increase with time.
Another myth is that after an insolvency has been declared, the debtor cannot buy a house afterwards. Most banks will fight over you to offer you a loan even after the insolvency file as long as you have a good financial security and enough down payment. They will compete to give you a mortgage though at a higher interest rate as compared to other people. A debtor can thus apply a mortgage to purchase a house even with an insolvency case in their files.
Filing insolvency does not mean that you will have to lose your house as many people believe. One can either lose or retain the house. This depends on the state as well as if he has a mortgage or not. Having a mortgage means that he has an increased card debt due to less equity as compared to one without a mortgage. This will allow him to keep his property though he is bankrupt.
There is also a misconception that taxes will not be dismissed. This is not true because some taxes are dismissible when one has declared bankrupt. Like personal income tax which has reached three years can be dismissed if it meets certain requirements.
Some myths about insolvency file may lead to a jail term or fine for the debtors. An example of such a myth is one claiming that not all the creditors should be listed in the file. This results in dire consequences especially if the debtor pays the creditor. This is forbidden as it is biased treatment which is prohibited in the legal procedure.
Another misinterpretation is that one can lose their job if they declared bankrupt. If your boss dismisses you because you have filed for this process, then you can sue him. The only required is to prove that the dismissal was solely on the grounds of been bankrupt. Though there is a condition that if by any chance the debtor tries to look for another job after he has filed for bankruptcy in Honolulu, HI, the new boss can use his bankruptcy report to decide whether to grant him a job or not.
There is a belief that to file for this procedure; the debtor must be broke. The only thing that is required is for the debtor to declare that he is unable to pay his bills when they are due. If at all the debtor was broke, he would not be in a position to pay for a lawyer because he requires one for this process. The state permits the debtor to hold on to a part of his property to avoid becoming state dependent because he cannot fend for himself.
Ten years after the insolvency has been filed, the debtor can apply for credit. Many people assume that after an insolvency, the debtor will never receive credit. This is not true as the insolvency file will appear on your credit report for only ten years, after this period you can get credits. Initially, the credit offered will be very little, but it will increase with time.
Another myth is that after an insolvency has been declared, the debtor cannot buy a house afterwards. Most banks will fight over you to offer you a loan even after the insolvency file as long as you have a good financial security and enough down payment. They will compete to give you a mortgage though at a higher interest rate as compared to other people. A debtor can thus apply a mortgage to purchase a house even with an insolvency case in their files.
Filing insolvency does not mean that you will have to lose your house as many people believe. One can either lose or retain the house. This depends on the state as well as if he has a mortgage or not. Having a mortgage means that he has an increased card debt due to less equity as compared to one without a mortgage. This will allow him to keep his property though he is bankrupt.
There is also a misconception that taxes will not be dismissed. This is not true because some taxes are dismissible when one has declared bankrupt. Like personal income tax which has reached three years can be dismissed if it meets certain requirements.
Some myths about insolvency file may lead to a jail term or fine for the debtors. An example of such a myth is one claiming that not all the creditors should be listed in the file. This results in dire consequences especially if the debtor pays the creditor. This is forbidden as it is biased treatment which is prohibited in the legal procedure.
Another misinterpretation is that one can lose their job if they declared bankrupt. If your boss dismisses you because you have filed for this process, then you can sue him. The only required is to prove that the dismissal was solely on the grounds of been bankrupt. Though there is a condition that if by any chance the debtor tries to look for another job after he has filed for bankruptcy in Honolulu, HI, the new boss can use his bankruptcy report to decide whether to grant him a job or not.
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