Published by Mark

The Fate Of Bankruptcy Myths Is In The Stars

March 6, 2009 at 8:47 am

Bill Stanley, officer in the Scientech Club, passed along an interesting email he’d sent out to club members, testing their general knowledge of astronomy. The message asked readers to pinpoint what the following statements have in common:

1. The North Star is the brightest star in the sky.

2. In space, there is no gravity.

3. A compass points north.

4. Total solar eclipses are rare.

Of course, I’m a consumer bankruptcy specialist, not a scientist, but I was pretty sure of my answer: What all these statements had in common is
a)they all have to do with astronomy and b)they’re all true. But then, I scrolled down to confirm my answer, and learned that every single one of these statements is false!

(The North Star’s not even in the top 40 brightest stars. There is gravity in space. The north pole of the compass points to the south magnetic pole, and solar eclipses occur more often than the Olympic games!)

So, Bill Stanley, tit for tat. What do these statements have in common?

1. You’ll lose everything in a bankruptcy.

2. If you file bankruptcy, you’ll have trouble getting credit for the rest of your life.

3. If you’re married, both spouses have to file bankruptcy.

4. You can only file bankruptcy once.

You guessed it – what these statements have in common is that every one of them is false – they’re examples of the many myths that surround bankruptcy.

1. Indiana has exemptions that protect certain kinds of assets, including a car (up to a certain value), money in life insurance and retirement plan accounts, household goods, and clothing. Not only don’t most people lose everything they have, most get to keep everything they have!

2. Immediately following the bankruptcy, you’ll be getting credit offers. Interest rates may be higher, but there will be no lack of opportunity to obtain credit cards, car loans, and other credit.

3. One spouse can file for bankruptcy if the debt is in that spouse’s name only. Most couples find it beneficial for both to file.

4. You can file a Chapter 7 bankruptcy once every eight years, and a Chapter 13 bankruptcy more often than that.

You see, many commonly held beliefs about bankruptcy – and most of the things creditors would like to have you believe about bankruptcy, are just like the Scientech email statements about heavenly bodies. They’re simply not true, not in the sky, not in the law – they’re just myths!

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