Although there are many myths and misconceptions about filing bankruptcy, the truth may surprise you.
Q: Is bankruptcy a better option for me than using a “Debt Settlement Company?
In almost every case, yes. Many so called “debt settlement” companies, do little for their clients except take their money and put them in a worse situation than they were before. When you call a debt settlement company, you will often face a high pressure sales pitch to sign up with many promises of what they will do for you. However, if you read the fine print of their contracts they do not guarantee anything (except taking your money). In many situations they set you up in a “payment plan” which you really can not afford when a bankruptcy could get rid of your debts without those payments. Even if they do manage to settle some accounts, you could face tax consequences that you would not face in a bankruptcy. Before signing up with any debt settlement company, get the facts about bankruptcy.
Q: Will I lose my home or my assets if I file bankruptcy?
Many people believe that they will lose everything if they file bankruptcy (home, assets, etc.), but most bankruptcy filers do not lose any of their assets because of certain protections and exemptions that exist under state and federal law. At your free initial consultation, we will explain to you how these exemptions and protections can benefit you.
Q: I have a retirement account, should I just liquidate that to pay my debts?
NO! Unfortunately too many people come to us after they have tried to survive by liquidating their retirement accounts. Not only does liquidating a retirement account create potential tax liabilities, but most of the time the person could have filed bankruptcy and kept 100% of their retirement account. Nearly all recognized retirement accounts can be protected up to their full value in bankruptcy.
Q: Do I have too little or too much debt to file bankruptcy?
There is no such thing as too little or too much debt depending on the facts and circumstances of your particular situation which is why it is important to sit down with an experienced bankruptcy attorney to discuss your case.
Q: Will I ever be able to get credit again?
It is a myth that you can never get credit again. While bankruptcy certainly affects your credit rating, Clients are often amazed at how soon they can begin to rebuild their credit. As an example, we have had many clients who have gone through the bankruptcy process and are later able to purchase a home.
Q: Will everyone know that I filed bankruptcy?
People tend to hesitate to file bankruptcy because they fear that their friends or neighbors will find out and it will cause embarrassment. While bankruptcy filings are public record, access to those records are not widely or easily available. Typically, the only people who know you filed bankruptcy are your creditors, your attorney and whoever you decide to tell. In fact, you would probably be surprised at the number of people you know who have been through the bankruptcy process without your ever knowing.
Q: What chapter bankruptcy should I file?
Most individuals or couples will either file a Chapter 7 or Chapter 13 bankruptcy and the differences between the two are substantial. While other sites and attorneys attempt to explain the intricacies of the types of bankruptcies on one web page, we feel that any attempt to do so is a disservice to you, as it may lead you to make a decision based on incomplete or partial information. An assessment of your specific situation should always be performed by an experienced bankruptcy attorney. Since our initial consultation is free, and we are always available to answer questions via phone or email, let us provide an assessment of your individual situation and provide the advice that is right for you. We will take the time to fully understand your situation and explain your options. We are not here to judge you, but are here to help you through a difficult time in your life with understanding, compassion and sound legal advice.