BANKRUPTCY FEARS & MYTHS
Some common fears and myths and why you should sleep better at night.
Before you file bankruptcy: Q. Should I even consider filing bankruptcy?
A. Since you are reading this you are taking the first step to understanding your options. There is no easy answer. One way to think about the question is to ask "Will I be better off 5 - 10 years from now if I file or not?" We can help you get to the best answer for your situation. Q. Some creditor is threatening to sue me if I don't pay them in a week. I'm worried. Do I need to file bankruptcy immediately?
A. Definitely not. Relax. It takes weeks or months before a creditor could get a court judgment against you and garnish your wages. Collection agencies are very good at trying to scare you to death. Don't let them do that. Call us and we will explain to you what you need to do. Q. Can a credit card company come and take my property?
A. Almost always the answer is no. The only time a creditor can take your property is when you have signed an agreement with the company like you do when you buy or lease a car or truck. Q. Must I file if my spouse files?
A. No. However, if there are joint debts such as both names on a credit card, the non-filing spouse will be responsible for the entire amount. Q. If my spouse files and I do not, my credit rating will be damaged.
A. No. As long as the non filing spouse does not have joint responsibility for the debts being discharged there will be no consequences. Q. Will I lose any of my property?
A. No, unless your house could be sold for much more than what you owe, or you have an exceptional amount of property. The vast majority of people who file Chapter 7 (liquidation) do not lose anything. The entire point of bankruptcy is to give people another chance to get on with life not burdened by debt. However, after your bankruptcy you should not incur any debt that you cannot pay off each month. After you file bankruptcy: Q. Can my creditors take any of my property or continue to call me?
A. Absolutelty NOT! Once your case is filed, the creditors are prohibited by law from taking ANY action to collect any debt from you. Your car and your property cannot be touched. They cannot contact you in any way and if they do you can sue them and collect $150. Q. Will I ever be able to get credit again?
A. Definitely yes. After your case is over you should get just one credit card and use it to buy just your groceries and gas and then ALWAYS pay the entire balance each month. Do not carry a balance from one month to the next. If you always pay the entire balance you credit will improve rapidly - you will be showing the creditors that you have learned your lesson and can manage your finances. You are then the type of person to whom they will extend credit. We have several cases where people were able to get a mortgage without a co-signor just a year after the completion of the bankruptcy case. Q. Will I get fired if my company knows about my bankruptcy?
A. Doubtful - it is strictly illegal for you to be fired for the sole reason that you have filed bankruptcy. However, it is possible you might get fired and have to fight the employer with a lawsuit.
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