10 Myths About Bankruptcy
Most people have at least some wrong information
about bankruptcy. Irrational fears hold people back from utilizing this
helpful process. We hope that by dispelling some of these widely held
myths, we can help you to determine whether bankruptcy is the right course for
you. The initial consultation with a bankruptcy attorney is free.
You owe it to yourself to call.
Myth I: Bankruptcy is difficult.
While there are many rules in bankruptcy
and the process may seem confusing, it is not so difficult that you should avoid
the benefits bankruptcy can afford you. If you have competent lawyers
representing you, the process should be straight forward for most consumers.
Myth II: If I file, I will lose all my property.
Because of several
exemptions built into the bankruptcy law, most people who file for bankruptcy
protection do not lose any property at all. Those with substantial property can
usually keep their property if they agree to pay back some or all of their debt.
Myth III: If I file, I will never get credit again.
It is possible to
rebuild your credit within months of filing bankruptcy. In many cases, clients
report having an easier time obtaining credit after the bankruptcy freed
them from so much debt.
Myth IV: If I file, I will lose my Pension, IRA, or 401(k).
In Illinois,
these assets are generally exempt. You will keep your pension, IRA,
and 401(k)
in bankruptcy.
Myth V: If I file, I will lose my job.
In most cases, employers will not
find out about the bankruptcy, unless you choose to tell them. Either way,
employers are not allowed to fire someone (or take other adverse action) for
filing bankruptcy.
Myth VI: My bankruptcy will hurt my
spouse's
credit.
When one spouse files
for bankruptcy protection, his or her spouse’s credit is generally not
affected.
Myth VII: Bankruptcy will not allow me to pay
the debts I want to pay.
Nobody
will stop you from paying a debt you wish to pay. After your discharge, you can
choose which debts to pay and which ones not to pay.
Myth VIII: Bankruptcy will not help me because I owe taxes.
While it is
true that some taxes will not be discharged, others can be. There are many rules
which an attorney can explain to you.
Myth IX: Filing bankruptcy will take too long.
The total time for a
straight bankruptcy is approximately four months. However, the debtor receives
the benefit of an automatic stay immediately after the petition is filed. The
automatic stay means that creditors are generally not allowed to attempt to
collect any debts from the debtor. The phone calls from creditors can end
immediately.
Myth X: Only deadbeats file bankruptcy.
Congress didn’t create the
bankruptcy laws to help bad guys. The laws are there to help people get out of
problems honestly. When good people have serious financial problems, they owe it
to themselves and their families to consider bankruptcy.
Back to
Bankruptcy Information Lead Page
Robert Honig is experienced in helping you eliminate your debt.
Contact him now for a free initial consultation at (630) 834-1800.
If you would like help in deciding whether filing for
Bankruptcy is the
right course for you, visit the Bankruptcy Info
Sheet.
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