There is a lot of misleading information in the world about filing for bankruptcy. We strongly suggest that before you believe any of them, you talk to a bankruptcy attorney who can give you the facts. Below you will find some of the most common myths we have seen. If you have questions or would like a free bankruptcy consultation, contact The Law Offices of Paul Y. Lee at 888-748-0025 right away.
Myth: Bankruptcy is No Longer an Option
False. It is true that there were changes to the bankruptcy laws in 2005 but almost all of the available relief remains. It is true that it can be more involved than before these laws took place – and in some cases it may cost more – but it is still just as possible as it once was. The key is to work with a bankruptcy attorney who can make it as quick and cost-effective as possible.
Myth: You Cannot Have Medical Bills Discharged
False. You may also hear people erroneously claim that you cannot discharge credit card debt in bankruptcy. The truth is that just about any unsecured contract debt, such as medical bills, credit cards, and personal loans, can be discharged during a bankruptcy proceeding.
Myth: If You File Chapter 13 You Must Repay Everything in Full
There are various Chapter 13 plans. Some of them involve paying general unsecured creditors nothing, while others require 100% payment – and all other options in between. The amount you will end up paying if you file Chapter 13 will depend on how much disposable income you have, how much your non-exempt assets are worth, and how many priority debts you have.
Myth: If You File Bankruptcy You Will Have Terrible Credit for Ten Years
No. A person who filed Chapter 13 may be able to borrow money while their case is ongoing. A person who files Chapter 7 will likely start getting credit card offers right after their discharge. Are they going to get great interest rates? No – but they can start building their credit right away. It is true that the Fair Credit Reporting Act allows bankruptcies to be reported for ten years but this does not mean that a person cannot get credit.
Myth: You Will Lose Everything if You File Bankruptcy
Most every bankruptcy case is filed by people who have “no-asset cases” which means that they keep everything they own. Why? Because there are exemptions that can keep assets for the debtor. For example, pensions are beyond the reach of any bankruptcy trustee or creditor.
To find out more about what assets you can keep and what you may have to give up, contact The Law Offices of Paul Y. Lee at 888-748-0025 for a free bankruptcy consultation. We are happy to provide a free consultation during which you can learn more about the options and determine which one is best for your needs.