10 Myths About Bankruptcy
Most people have at least some wrong information
about bankruptcy. Irrational fears hold people back from utilizing this
helpful process. We hope that by dispelling some of these widely held
myths, we can help you to determine whether bankruptcy is the right course for
you. The initial consultation with a bankruptcy attorney is free.
You owe it to yourself to call.
Myth I: Bankruptcy is difficult.
While there are many rules in bankruptcy
and the process may seem confusing, it is not so difficult that you should avoid
the benefits bankruptcy can afford you. If you have a competent lawyer
representing you, the process should be straight forward for most consumers.
Myth II: If I file, I will lose all my property.
Because of several
exemptions built into the bankruptcy law, most people who file for bankruptcy
protection do not lose any property at all. Those with substantial property can
usually keep their property if they agree to pay back some or all of their debt.
Myth III: If I file, I will never get credit again.
It is possible to
rebuild your credit within months of filing bankruptcy. In many cases, clients
report having an easier time obtaining credit after the bankruptcy freed
them from so much debt.
Myth IV: If I file, I will lose my Pension, IRA, or 401(k).
In Maryland,
these assets are exempt. You will keep your pension, IRA,
and 401(k)
in bankruptcy.
Myth V: If I file, I will lose my job.
In many cases, employers will not
find out about the bankruptcy, unless you choose to tell them. Either way,
employers are not allowed to fire someone (or take other adverse action) for filing bankruptcy.
Myth VI: My bankruptcy will hurt my
spouse's
credit.
When one spouse files
for bankruptcy protection, his or her spouse’s credit is generally not
affected.
Myth VII: Bankruptcy will not allow me to pay the debts
I want to pay.
As a general rule, nobody
will stop you from paying a debt you need to pay to retain property.
Myth VIII: Bankruptcy will not help me because I owe taxes.
While it is
true that some taxes will not be discharged, others can be. There are many rules
which an attorney can explain to you.
Myth IX: Filing bankruptcy will take too long.
The total time for a
Chapter 7 bankruptcy without complications is as little as four months. However, the debtor receives
the benefit of an automatic stay immediately after the petition is filed. The
automatic stay means that creditors are generally not allowed to attempt to
collect any debts from the debtor. The phone calls from creditors should end
immediately after filing.
Myth X: Only deadbeats file bankruptcy.
Congress didn’t create the
bankruptcy laws to help bad guys. The laws are there to help people get out of
problems honestly. When good people have serious financial problems, they owe it
to themselves and their families to consider bankruptcy.
Back to
Bankruptcy Information Lead Page
Wampler, Souder & Sessing, L.L.C. is experienced
in
helping you eliminate your debt. Contact
us now for a free initial consultation at 301-881-8895 in Rockville, Maryland
or at 301-736-5432 in Upper Marlboro, Maryland or at 301-662-5709 in Frederick, Maryland.
If you would like help in deciding whether filing for
Bankruptcy is the
right course for you, visit the Bankruptcy Info
Sheet.
Please review the disclaimer
below
