Some Myths About Bankruptcy And The Truths Behind Them
If you are overloaded with debt, filing for bankruptcy may be the best possible solution. Every year, bankruptcy offers thousands of people the opportunity to start over with their financial lives and leave the sleepless nights of worry behind them.
Before deciding to file for bankruptcy, however, it is critically important to make sure you understand all the facts, advantages and disadvantages of the bankruptcy system.
After more than 40 years of guiding Memphis-area residents through the bankruptcy process, the Law Office of Rich & Rich has counseled people on almost every type of worry or concern that they bring to our offices.
Here we present some of the most common worries about bankruptcy, many of which are based on misunderstandings about how bankruptcy works.
Myth #1: The Bankruptcy Reform Laws Of 2005 Will Prevent Me From Filing
While the 2005 bankruptcy reform law passed by Congress did make major changes to the process, it is not impossible for you to seek bankruptcy protection and wipe out some – if not all – of your consumer debt.
The law did make it harder for people with low debt ratios (a debt ratio is the amount of your debt relative to the amount of your income) to file, and it requires everyone to go through credit counseling before filing.
However, some form of bankruptcy is still available to most people. Even if you do not qualify for Chapter 7 bankruptcy (which wipes out your unsecured debt), you may still qualify for Chapter 13 bankruptcy (which creates a court-ordered and more manageable debt repayment plan).
Myth #2: I’ll Lose All My Possessions If I File Bankruptcy
Nothing could be further from the truth. Many of our clients do not lose any possessions when filing for bankruptcy.
Chapter 7 bankruptcies have several exemptions that will give you a great chance at holding on to your home, your car and other valuables. Your retirement savings will also be safe.
Under Chapter 13 bankruptcy, you also may keep your home and other property.
Myth #3: I’ll Never Be Able To Buy Another House
It is true that filing for bankruptcy will harm your credit in the short-term and that you will have to work hard to rebuild it. However, you will be able to buy a house again. You will qualify for credit again. But, you will also have to accept a higher interest rate on your mortgage.
Myth #4: I’ll Be Fired If I File For Bankruptcy
Many people worry about news of their bankruptcy filing becoming public and affecting their job or their ability to find a new job. The law, however, is very explicit: You cannot be fired because of your bankruptcy. Talk to an attorney immediately if this happens to you.
Get Bankruptcy Advice From A Lawyer With More Than 40 Years’ Experience
Our attorneys personally handle every stage of each client’s case. For a free and confidential consultation with an experienced bankruptcy lawyer, contact our office. We will answer your questions and discuss your options in a comfortable and respectful setting.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.