Bankruptcy myths
Bankruptcy has many myths surrounding it that simply aren’t true. The main reason for this is there are different types of bankruptcies and they can be complicated. Each circumstance is different than the next and needs to be evaluated by an experienced attorney. We can answer many of these types of questions as it pertains to your situation at your initial consultation.
My credit will be damaged for 10 years after filing for bankruptcy.
This is not necessarily true. Bankruptcy stays on your credit about 7 to 10 years. Although the bankruptcy will stay on your credit, you can start the rebuilding process once your bankruptcy is discharged. Making on time and full payments on debt is one way to start building your credit while you are still in the bankruptcy. Once you are out of bankruptcy, make sure that you watch your income to debt ratio and try to not finance more than 40% of your credit limit.
Very few people qualify to eliminate their debt through Chapter 7.
Congress made the requirements for eliminating debt through Chapter 7 bankruptcy tougher with the new bankruptcy laws of 2005, but many people still qualify. Qualification is based generally on your assets, type of debts, and household income. At the initial consultation, we can usually determine if you qualify for a Chapter 7 right then.
If I file bankruptcy will my family find out.
In most cases the only way your family or friends will find out you filed for bankruptcy is if you tell them. It is true that a bankruptcy filing is a public record, but most people do not spend the time required to find out if an individual has filed for bankruptcy protection. In our practice area the local papers do not publish lists of people who have filed for bankruptcy.
I do not need to list all my debts and assets when filing a bankruptcy petition.
This is not true, when you file for bankruptcy protection must list all your debts and assets. This includes debts owed to family members. If you want you can always pay back creditors after you get your bankruptcy discharge.
Creditors can still contact me after filing for bankruptcy.
Once you file for bankruptcy protection creditors are prohibited from contacting you by the bankruptcy automatic stay. The automatic stay keeps creditors from contacting you while the bankruptcy case is pending, it also stops all wage garnishments and bank levies.
I should use my retirement money to pay down my debt.
Before you use any retirement money to pay outstanding you should meet with us to determine if that is the best idea. In many cases using the retirement money will only delay the filing of a bankruptcy, and then you will not have any money for retirement. In most cases the retirement money is exempt in the bankruptcy.
