The truth about common bankruptcy myths

FALSE. The truth is most people that file chapter 7 and 13 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.  Your bankruptcy attorney will guide you through all the steps necessary to protect your assets.

FALSE. The fact is that certain taxes are indeed dischargeable in chapter 7 and 13 Bankruptcy. A review of your personal tax debts by your bankruptcy attorney 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.

FALSE. You will be able to get credit again, typically immediately after coming out of chapter 7 and 13 bankruptcy.  Many people who go through Bankruptcy are able to get a credit card and buy a car once their case is done.  You can be in the position to purchase a home within 2 to 4 years. 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.

 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.

FALSE. So long as you do not have joint debt with your spouse, your spouse's credit is generally not affected by your chapter 7 and 13 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 chapter 7 and 13 Bankruptcy, you can still choose to voluntarily repay any particular debts.

FALSE. The truth is, chapter 7 and 13 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.

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.