The truth about common bankruptcy myths

I will lose my property in Bankruptcy

FALSE. The truth is most people that file Bankruptcy are able to keep all of their property, this includes houses and cars. Most property in Bankruptcy is exempt and protected from recovery by creditors. Typically, as long as you keep making the payments on houses and cars you want to keep, you will not lose them.

Personal taxes are not dischargeable in Bankruptcy.

FALSE. The fact is that certain taxes are indeed dischargeable in Bankruptcy. A review of your personal tax debts will allow us to determine which taxes are, and are not, dischargeable through Bankruptcy. For taxes that are not dischargeable, you may have the option of using a Chapter 13 Bankruptcy to create a payback period of up to 5 years.

I will never get credit again.

FALSE. You will be able to get credit again. Many people who go through Bankruptcy are able to obtain new credit in as little as 6 months, and be in the position to purchase a car or home within 1 to 2 years following your Bankruptcy filing. Remember, the most important thing following the filing of a Bankruptcy is what you do in the months and years following the filing. As long as you pay your bills on time and continue with steady employment, you will be able to obtain credit again.

I can only file for Bankruptcy once in my life.

 FALSE. You can file Chapter 7 Bankruptcy again as long as it has been at least 8 years since receiving your last Bankruptcy discharge. Even if it is too soon for you to file Chapter 7 Bankruptcy again, you may still be able to file Chapter 13 Bankruptcy.

Bankruptcy will affect my spouse.

FALSE. So long as you do not have joint debt with your spouse, your spouse's credit is generally not affected by your Bankruptcy.

I can choose which debts I include in my Bankruptcy.

 FALSE. You must list all of your debts in your Bankruptcy, including debts you plan to keep paying, such as mortgages and car payments. Even though all of your personal debt may be discharged in Bankruptcy, you can still choose to voluntarily repay any particular debts.

I will lose my Security Clearance if I file bankruptcy.

FALSE. The truth is, bankruptcy is preferable to having lingering financial issues. Often times, people up for renewal of their security clearance are advised to consider bankruptcy if they are dealing with significant financial issues.

Filing for Bankruptcy is a terrible thing to do.

FALSE. Bankruptcy is not the end of the world. The fact is there are things that happen that are out of your control. When the debt becomes unmanageable, steps must be taken to get back on track. Bankruptcy was created for that purpose. In even considering filing for Bankruptcy, you have taken the first positive step to dealing with your financial problems and creating a fresh start for you and your family.