5 Big Bankruptcy Myths Debunked
You will not lose all of your property. You are entitled to protect different types of property in bankruptcy, and the vast majority of Chapter 7 cases are “no asset” cases, which means that a debtor obtains a discharge of their debts without losing any of their property.[hr style=”2″ margin=”10px 0px 10px 0px”]
Your friends and family will not know. Although there is nothing to be ashamed of, many clients would prefer if their family/friends did not know about the bankruptcy. Your case will be public knowledge, so the documents will be publicly available, but generally the only people that learn of your bankruptcy are your creditors and their attorneys. Unless you are a celebrity or public figure, there is generally no reason why your case would be known to your friends or family.[hr style=”2″ margin=”10px 0px 10px 0px”]
You cannot be fired. There is a specific section under the bankruptcy code that prevents any employer from firing you solely due to a bankruptcy filing. If this provision is violated, then the employer could be liable for significant damages and sanctions.[hr style=”2″ margin=”10px 0px 10px 0px”]
You will be offered credit in the future. The fact that you filed for bankruptcy can remain on your credit report for 10 years, but the impact that a filing would have on your score is dependent on what your score is, and what it would be if you didn’t file. Although you may be offered credit at higher interest rates in the near future, it is fairly common for clients to receive credit offers shortly after receiving their discharge.[hr style=”2″ margin=”10px 0px 10px 0px”]
Income taxes can be dischargeable. Although most debts are dischargeable, there are some types of debts that are generally not dischargeable. Income taxes fall in the middle – although they cannot be discharged immediately after your returns are filed, they do become dischargeable as time passes.
In the right circumstances, bankruptcy can help you deal effectively with financial difficulties and other legal problems and help you work towards a new financial beginning. If you believe bankruptcy may be a good option for you, we offer a free consultation customized to your needs. Contact us to find out more.