Learn the Truth About Bankruptcy
Here are the Top 15 Myths your creditors want you to believe
…and the reason why every one of them is NOT TRUE.
Unless you’re a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors and the people who you tell. While it’s true that your bankruptcy is a matter of public record, the number of filings is so massive, that unless someone is specifically trying to track down information on you, there is almost no likelihood that anyone will even know you filed. However…telling someone that someone else filed bankruptcy is good gossip…just like telling a someone you heard so-and-so is getting a divorce. So…if you don’t want everyone you know to know you filed bankruptcy….you need to keep the information to yourself. As for newspapers…my experience is that most papers don’t include information about who filed bankruptcy…. and even if they did…think about it….who would be interested enough to read that stuff.
First….while laws vary from State to State, every State has exemptions that protect certain kinds of property. Using Indiana as an example…..there are exemptions to protect such things as your house, your car, your truck, household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, and wages. In those rarer situations where you have more property than can be protected by available exemptions…there is Chapter 13. In Chapter 13…you can even keep this property by paying a higher Chapter 13 plan payment.
Therefore…if you want to keep a car, truck, home or business equipment that serves as collateral for a loan….you need to keep paying on the debt. If you make these payments and have exemptions to cover any value above what is owed….you can rest assured you will be able to keep these items.
A surprising number of people believe this….but this is completely false. In the future…you can buy, own and possess whatever you can afford.
Quite the contrary. Filing bankruptcy gets rid of debt….and getting rid of debt puts you in a position to handle more credit….and this makes you look more attractive to would-be lenders. In my experience…..unfortunately….it won’t be long before you’re getting credit card offers again. I say “unfortunately” because I don’t want you to get right back in debt again. At first…the would-be lenders will want more money down and will want to charge you higher interest rates. However….over time….if you are careful, and keep your job, and start saving money, and pay your bills, and do things that will put good marks on your credit report….the quality of your credit will get better and better. Generally…in my experience…if a client has not re-established good credit in 2 to 4 years…sufficient to buy a car or even a house….it’s not because they filed bankruptcy. It generally means that something else has happened after the bankruptcy to hurt their credit.
Furthermore…as I mentioned above…in my experience…if you have not re-established good credit in 2 to 4 years after you file bankruptcy…..most likely….it has nothing to do with the fact that you….once upon a time….filed bankruptcy…and it certainly has absolutely nothing to do with the fact that your credit history still shows an old bankruptcy.
Not true. There’s a reason over 1,000,000 Americans file bankruptcy each year…and it’s not because they’re bad people. Lots of good, honest, hard-working people fall on hard times. Let’s face it….life can be brutal….and sometimes…the money’s just not there. The bankruptcy laws were created with this in mind…to make sure you have a way….if need be….to get free from the burden of debt…so that you…and your family….can have a second chance at a “fresh start”.
The big surprise for my clients is when I tell them that filing bankruptcy can actually help them re-build their credit. Bankruptcy gets rid of debt….and getting rid of debt puts you in a better position to handle new credit….if only someone will give it to you. Therefore….bankruptcy is the first step in the process of re-building your credit.
Myth 12 : If you file for bankruptcy, it may cause more family troubles and may even lead to divorce.
The truth is….you can only file for a Chapter 7 bankruptcy once every 8 years….but after 8 years…if need be…you can file again. As for filing a case under Chapter 13 of the Bankruptcy Code….the restriction is even looser. Hopefully…however…you will never need to file more than one bankruptcy.
I’m sorry…but you can’t. Doing so would be against the law. Under the law…when you file bankruptcy…you have to list all your property and all your debts. Most people want to leave out a debt because it is their intent to keep paying on it. The good news….on this score….is that you can achieve the same goal, even though you have to list the debt. If you want to keep paying on a debt…after bankruptcy….you can. After bankruptcy….you can go back and pay anybody you want. In fact…after you file bankruptcy….there are some debts you have to keep paying on. For instance….if you have a car, truck or house loan….even though you list the debt in your bankruptcy….if you want to keep the car, truck or house….you have to keep paying on the debt. More importantly….you need to know this. As long as you stay current on the loan…and keep the property properly insured….you are protected under the law …. and you get to keep the property….because…under the law…the creditor is stuck with you and can’t do anything about it.