Bankruptcy is widely considered something to be ashamed of in the United States, so it is no surprise that there are many myths that accompany the topic. McDowell Posternock Apell & Detrick, PC wants to help put some of these myths to rest so you feel more comfortable with the prospect of bankruptcy as a solution to your financial struggles.
Some common bankruptcy myths include:
- The bankruptcy process is long and difficult. It is true that there are a lot of rules and paperwork involved in declaring bankruptcy, but with a McDowell Posternock Apell & Detrick, PC attorney by your side, each step will be explained to you in a straightforward way. A typical Chapter 7 bankruptcy case is only about six-months long.
- There is no point in hiring a bankruptcy lawyer since I can declare on my own. Although it is true that you can file bankruptcy on your own, it is to your benefit to seek the counsel of an experienced bankruptcy attorney. Only bankruptcy attorneys are well-versed in all the complex laws and paperwork involved in filing. If you file for bankruptcy without the help of a lawyer, it is possible that you will not achieve everything bankruptcy relief has to offer or worse, you may be denied a discharge from your debt because of a mistake on your part. It is critical that you have an experienced attorney on your side so that you accomplish your goal of discharging as much debt as possible.
- Filing for bankruptcy will ruin my credit forever. It is likely that your credit is already suffering if you are seriously considering bankruptcy as an option. You can begin rebuilding your credit immediately after your bankruptcy petition is filed, and bankruptcy can only remain on your credit report for 10 years. Your interest rates for credit cards will initially be high, but your credit will improve as you prove yourself a responsible bill payer. You can obtain a solid credit score in as little as three years.
- The court will take all my property, including my house and car. Bankruptcy is designed to help you through difficult financial situations and isn’t meant to take away essential assets like your home and car. Filing for bankruptcy freezes foreclosures and repossessions, and your lawyer will discuss the options you have to protect these very important assets. Many if not all of your assets will be exempt during bankruptcy.
- Declaring bankruptcy will ruin my spouse’s credit, too. Being married doesn’t mean all your assets are connected; both spouse’s names must be present on a contract for it to be a joint agreement. When one spouse files for bankruptcy, the other’s credit will not be impacted unless the debts are shared. A bankruptcy attorney at McDowell Posternock Apell & Detrick, PC can advise you about how to best protect your spouse in this kind of situation.
- Bankruptcy can’t help me if I owe the IRS tax money. Bankruptcy laws are complicated when it comes to taxes. It is true that some tax debts can’t be eliminated, but others can be. Additionally, in Chapter 13 bankruptcy, you may be able to restructure these debts into a more manageable payment plan.
- Bankruptcy will cost me my job and prevent me from securing a job in the future. Employers are prohibited from firing or refusing to hire based on a bankruptcy. It is also unlikely that your employer will find out you declared bankruptcy unless you tell them. Bankruptcy proceedings may be public, but very few people pay attention to them unless the case involves someone of prominence.
- I can’t file for bankruptcy more than once. There are time constraints involved in filing for bankruptcy a second time, but you are permitted to file more than once under certain circumstances. If you previously filed a Chapter 7 bankruptcy petition, you can get another Chapter 7 discharge in eight years. If you previously filed a Chapter 13 bankruptcy, you cannot file again until after completing your payment plan.
- I will need to deplete my retirement savings (IRA or 401K) if I file for bankruptcy. Your retirements savings are generally protected during bankruptcy proceedings. An attorney will explain the best way to protect your retirement plan during bankruptcy.
- Filing for bankruptcy will eliminate all my debts. There are certain debts that cannot be discharged – or completely eliminated – through Chapter 7 bankruptcy. The most common debts that cannot be eliminated are student loans, along with child and spousal support. There are also some tax debts that cannot be discharged.
Seek bankruptcy advice with a free phone consultation
If you think bankruptcy may help you through your financial problems but are wary because of the social stigma, the knowledgeable South Jersey bankruptcy attorneys at McDowell Posternock Apell & Detrick, PC are here to put you at ease. We will explain all your options, detail how bankruptcy will impact your life, and dispel the myths you may have heard about bankruptcy. Call us today or fill out our contact form to schedule a free phone consultation to learn more about how to file for bankruptcy.