1. Bankruptcy will Hurt My Credit.
Most individuals who have are thinking of filing bankruptcy generally do not have good credit. Although it is true that a bankruptcy will stay on your credit for 7 to 10 years, you will start rebuilding your credit almost immediately. Often times you will begin receiving credit card offers within the first 6 months after discharge of a bankruptcy. Of course, your credit score will be dependent on your credit habits after the bankruptcy is discharged.
2. I'm embarassed to file bankruptcy, I don't want my friends and family to know I need financial help!
True that bankruptcy records are public information, but unless you are running for office, it is unlikely that anyone will research your bankruptcy history. Furthermore, most people don't even know how to find such things anyway!
3. Since the laws changed, I will have to repay my debt anyway, so what's the point?
Not true! The new bankruptcy laws affect who can file for bankruptcy and what they can file for. Under the new laws, an individual filing for Chapter 7 must meet the means test and the median income test. If you do not qualify under the means and median income tests, then you do not qualify for Chapter 7 but must file Chapter 11 or Chapter 13.
4. I feel morally obligated to pay back my debts.
Millions of individuals have filed for protection under the bankruptcy code. None of those individuals were bad people, they were people who faced fnancial hardship and needed help. You are no different. Some of the most famous individuals have filed for bankrtupcy, including the most honest American in history, Aberham Lincoln.
5. I file bankruptcy on some of my debts but not others.
No. You have to list all of your assets and liabilities. Although in a Chapter 7 you can reaffirm certain debts, they still have to be included in the petitions.
6. Bankruptcy is too complicated and difficutl to file.
Not true. Although the bankruptcy laws are extremely difficult to work through, we are here to help you step by step through the process. Feel free to contact our office regarding any questions or concerns you may have.
7. I will lose everything if I file bankruptcy.
Not true! Most individuals who file for chapter 7 do not lose anything in the bankruptcy process. There are exemptions that are built into the bankrtupcy system that protect most of your personal property and sometimes even equity in your personal residence. Since most individuals today do not have any equity in the personal residence, they will not be effected.
8. I will never be able to own property again.
As goes the credit score so does the ability to borrower. After the discharge of the bankrutpcy, the credit score generally bounces back relatively quickly. As such, so will the ability to own property.
9. I'm married and I have to file with my wife.
Again not true. Each individual can file bankruptcy for themselves. There is no requirement that married couples file together. Although this will affect any community debts you may have. Of course, we are here to discuss these issues with you at length.
10. You can only file bankruptcy once in your life time.
Not true. An individual is allowed to file chapter 7 once every 8 years and chapter 13 once every 6 years.
11. There are some debts that are not dischargable.
This is actually true. There are some debts that are not dischargable in bankruptcy. Student loans may be difficutl to discharge as well as some spousal obligations. Furthermore, any wrongful death settlements that may be as a result of drunk driving. Lastly, taxes receive different scrutiny then normal unsecured debts. Otherwise, most if not all other types of debt are dischargable.