7 Myths to filing Bankruptcy

7 Myths to Filing Bankruptcy

1. My credit will be ruined: False,  It is true that filing for bankruptcy you will have a negative public record on your credit report.  However, often times when you have made the conscious decision to file for bankruptcy your credit is not in the best of conditions.  You probably have late payments, or even judgments against you.   Those who file for bankruptcy can expect to see an increase in their credit score a year after filing. 
2. I will never be able to have a credit card again:  False,  bankruptcy is getting rid of the debt from the past.  Banks may be more conscious of releasing large amount of credit your way, but many are willing to help you establish your credit.  This includes giving you low limit credit cards or having you establish a secured credit card.
3. I will lose everything if I file:   False, State bankruptcy laws prevent debtors from losing everything.  Each state has a set of exceptions that they are allowed to keep, after the bankruptcy is discharged.     
4. Because of the changes in law, bankruptcy is not an option: False, in 2005, the government made it more difficult to file for bankruptcy. However, just because it is more difficult does not make it impossible.  The laws are more stringent on who can file what chapter, but they do not restrict you from filing altogether.  Working with an attorney can help you determine which bankruptcy chapter is best for you.
5.  I filed bankruptcy in the past, I am ineligible to file again:  False, the law allows you to receive a chapter 7 discharge once every eight years.   For a Chapter 13, the law does not limit the number of times you can file, even if it is within 8 years of the prior bankruptcy.  
6. If I file for bankruptcy the creditors will call and harass me:  False,  filing for bankruptcy gives you an automatic relief from stay. In most cases this will allow you to get relief from the harassment of creditors.
7. I don’t need an attorney to file bankruptcy, I can do it myself, it is easy.  It is true that you do not have to hire an attorney to file bankruptcy but hiring an attorney can make the process a lot easier, and help you get your discharge faster.  An attorney knows the ins and outs of the bankruptcy process. They have computer applications that allow them to fill in the bankruptcy petitions and file in one easy process.  Filing for bankruptcy is very procedural, and the fail to file properly can get your bankruptcy case dismissed.

The information provided on this blog is offered for informational purposes only; it does not constitute legal advice. Candace J. Arroyo does not represent you based upon your visit or review of this blog.