Bankruptcy Myths

You won't be able to keep anything you own.

False. In a Chapter 7 Bankruptcy, the law allows people who file for bankruptcy to keep most if not all of their personal property depending on the applicable exemptions. The Bankruptcy law recognizes that keeping personal property is essential for people to get a "fresh start" after bankruptcy. In a Chapter 13 Bankruptcy, debtors keep all of their assets as long as they are making their court approved Chapter 13 Bankruptcy payments pursuant to their Chapter 13 Bankruptcy plan. Contact us today for more information about keeping personal property.

You will not be able to get credit again.

False. You can establish good credit again, even after a bankruptcy. At first, you may experience higher interest rates and larger down payments needed on anything you lease or buy, but by keeping your income steady and paying your bills on time, you can establish good credit again.

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Filing for bankruptcy will ruin your credit for 10 years.

False. Although the bankruptcy filing does remain on your credit report for 10 years, your credit can be re-established after the filing of bankruptcy. How? All the overdue bills you already had showing on your credit prior to the bankruptcy will likely be discharged. As time goes by, your score will go up, especially if you carefully and responsibly re-establish your credit.

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You can erase all of your debts by filing for bankruptcy.

Most debts can be discharged, including credit card debt, unsecured personal loans, medical bills and others. However, child support, alimony, most taxes and most student loans cannot be discharged.

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If you are married, you and your spouse must file for bankruptcy.

False. It is not required by law that you both file for bankruptcy. It is important for your attorney to evaluate your specific situation and determine whether you, or you and your spouse, should file for bankruptcy.

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You can only file for bankruptcy once.

False. After 8 years you can file for a Chapter 7 once again. Chapter 13 requires a 2 year wait after a prior Chapter 13 filing in which a discharge was granted.

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You cannot file bankruptcy if you have a job.

False. In fact, most of Thomas L. Abrams clients have a job when they file for bankruptcy and many also have high paying jobs but were forced into bankruptcy due to the guaranty of business debts or upside down investment properties. Bankruptcy has many possible advantages for all types of individuals and corporations.

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It is difficult to file for bankruptcy.

False. It may be a difficult decision for you to go through with a bankruptcy to solve your debt situation, but once you have decided, an experienced attorney can efficiently help you through the process.