Most people have misconceptions about bankruptcy. Misinformation and irrational fear stop people from exercising their rights. By dispelling some of these widely held myths, we can help you to determine whether bankruptcy is the right course for you. Your initial consultation with us is always free.
Myth I: Bankruptcy is complicated and difficult to complete.
It is much easier than most people realize. While there are many rules involved in the process, the process is very straight forward to competent bankruptcy attorneys. A Chapter 7 bankruptcy is usually completed in 4 to 6 months and usually only requires one hearing. Everything else is taken care of by your attorney and the bankruptcy court.
Myth II: Bankruptcy will destroy my credit.
Most people who file bankruptcy see a significant increase in their credit score within the first 12 months following the bankruptcy. You can start improving your credit immediately following the bankruptcy as opposed to continuing to hurt your credit by failing to address your financial problems without bankruptcy.
Myth III: I won’t be able to keep my house or car.
The vast majority of people do not have to give up any of their property.
Myth IV: If I file, I will lose my retirement accounts.
In New Jersey, retirement accounts such as 401ks and IRAs are generally exempt from 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) because they filed bankruptcy.
Myth VI: My spouse’s credit will be ruined by my bankruptcy.
Should you decide to file independently from your spouse, his or her credit will not be affected. Neither your spouse’s social security number or name will even appear on the bankruptcy paperwork.
Myth VII: I will not be able to pay back the debt I want to pay.
After discharge you are free to pay anyone you want. Bankruptcy has no say in who you decide to pay after the bankruptcy.
Myth VIII: You cannot wipe out taxes in bankruptcy.
While you cannot discharge some debts owed to the government, income taxes claimed over 3 years ago can be eliminated in bankruptcy.
Myth IX: Everyone will know I filed bankruptcy.
While bankruptcy is public record, it is not something that is regularly publicized. Literally millions of people file bankruptcy every year without their family, friends, or neighbors ever finding out.
Myth X: Only deadbeats file bankruptcy.
Bad things happen to good people. Bankruptcy is meant to help people who can no longer pay their debt. The vast majority of people are forced to file because of the loss of their job, divorce, medical bills, or a similar situation. When good people have serious financial problems, they owe it to themselves and their families to consider bankruptcy.
Take a look at how your neighbors right here in Mount Holly have benefited from bankruptcy.