In my many years of talking to people I am amazed at the amount of misinformation that is out there. A lot of the people that I meet with have waited far too long to seek the assistance of a bankruptcy attorney; a garnishment may be in place, a foreclosure at their doorstep or they have just endured the economic hardship for many years. They are scared, stressed out and feel alone. When asked why, it was due to some misinformation that they had been given by well-meaning friends and/or relatives.

I’m not eligible to file a bankruptcy because I make too much money.
While the bankruptcy law change of October 2005 created a means test for qualifying to file a Chapter 7, even if you make too much money and cannot file a Chapter 7 there is the option of a Chapter 13 for you which will give you financial relief.

I have filed a bankruptcy before, I can’t file another one.
There is a difference between filing a bankruptcy and receiving the discharge, which eliminates your debts. There is eight years between the filings of a Chapter 7, however you may be able to file, and receive a discharge in a Chapter 13 bankruptcy. Even if you cannot receive a discharge in a Chapter 13 bankruptcy you may still be able to file a Chapter 13 bankruptcy to get immediate relief and stop a foreclosure.

I don’t want everyone to know I have filed a bankruptcy.
You would probably be surprised at how many people you know have had to file a bankruptcy. Having said that, even though bankruptcies are public record, there is not a listing in the newspaper. Anyone who finds out would have had to go to the US Bankruptcy Court and searched for your information.

Only people that purposely abuse their credit cards, are morally bankrupt or are deadbeats file bankruptcy.
Since seeing people since 1988, I can count on one hand who this would apply to. I find that most people who need to file bankruptcy have hit on hard times; they were living paycheck-to-paycheck and had some type of catastrophe; a divorce, a death in the family, loss of a long-term job, major illness. I have also had many clients that at one time were making a good living but had one of the above happen to them and wipe everything out that they had.

If I file bankruptcy I will lose my car…home…property.
Bankruptcy has exemptions which pulls your property out of the bankruptcy estate and allows you to keep it. For example, in Oklahoma you are allowed your clothing up to $4,000, furniture and $7,500 equity in a vehicle (the equity is the value of the vehicle less any loans). You also get to keep your tax-exempt retirement accounts and college-savings plans. There are other exemptions available, but you get the picture. If you have property that is not exempt (do not ever title it in someone else’s name, a Trustee can undo your transfer and still take the property, which includes a large wad of cash) you can still keep the property under a Chapter 13 bankruptcy.

But I have to go to Court.
You do have to attend what is called a “Meeting of Creditors” hearing. There is not a judge in attendance but your Trustee (either a Chapter 7 or Chapter 13, depending on what chapter you filed). I have appointments with my clients prior to prepare them for this hearing, and I also attend the hearing with them. This is a small price to pay to get rid of all of your debt. If there are any contested matters, you have to attend Court for that also (pretty rare).

I get to keep all my mortgaged property and not pay for it.
I am surprised at how often I hear this one. Bankruptcy gets rid of debt, not liens. Your car, home, furniture loans…..if you want to keep the property you have to keep the debt. If you give back the property the debt will be discharged in the bankruptcy.

My credit will be ruined.
A bankruptcy filing does goes on your credit report for ten years, but what does your credit look like now? Even if it looks good and payments are current, how long can you keep this up? The only way to clean the debt up now is to pay it off or become current on the payments. While it is also true that the initial filing of the bankruptcy may lower your credit rating, Bankruptcy will discharge most debts and allow you a “fresh start” to rebuild your credit.

I will never get credit again.
I find that most of my clients are being offered credit cards before their bankruptcy is even finished. They can even get car and home loans (home loans may be 1 – 2 years after your bankruptcy is complete, and you must have perfect credit from the bankruptcy filing forward, this from a realtor friend of mine). You will want to be extremely cautious and choose credit wisely to rebuild, and not get back in the situation that led you to file in the first place.

I really need to file bankruptcy but my spouse won’t let me because his/her credit is good and everyone knows that you both have to file.
Both spouses do not need to file, you can file an individual bankruptcy. However, if your spouse is liable for any of the debts then while you will no longer be responsible for the debt, your non-filing spouse will still be responsible. Heck, if you are married, you can also file a joint bankruptcy even if you are separated and don’t live together.

I can’t file bankruptcy, because I don’t have any credit cards, I only owe medical bills / utilities / payday loans / past-due taxes that you cannot get rid of in bankruptcy.
While it is true that bankruptcy does not eliminate some type of debt (child support, alimony, debt incurred from fraud or drunk driving, student loans, and yes, most type of taxes, to name a few), you don’t have to just have credit cards to file bankruptcy (or even a minimum amount of debt, but that is another subject matter). Bankruptcy will get rid of medical bills, past-due utility bills (but the utility company will require a deposit), payday loans, and many other types of debt. If your debt is the type of debt that cannot be eliminated (such as taxes), it might still be able to be controlled in a Chapter 13 bankruptcy to prevent garnishment of wages. See if a filing will help your situation or if there is another way out.

It is too late for me to file – I am already being garnished, my property has already been foreclosed, my car has been picked up or I have a Court date set already.
The filing of a bankruptcy puts in place an “automatic stay” which halts all collection activity. It will stop a Court date from happening, it will stop future garnishments, and depending on when your property was picked up it MAY be able to be returned (IMMEDIATELY SEE AN ATTORNEY). Even if you cannot get your property returned, the filing of the bankruptcy will eliminate any deficiency amount that you might owe (the amount that is left over after the proceeds of the sale is applied against the loan – without a bankruptcy you will owe this).

I hope that this will lay to rest some of the stories that you might have heard. If you are having financial problems your best option is to make an appointment with a competent bankruptcy attorney who will give you your options and let you know what is available to you. So many of my clients come into my office scared, nervous, and stressed out. Once their bankruptcy is filed they tell me that the relief that they feel and the loss of stress that they have is tremendous, and the only regret that they have is that they did not file sooner.

I offer a 30-minute free first visit. Come see me and get the facts, ma’am, just the facts.