Top 16 Myths About Bankruptcy

You know all those bad things ….you’ve always heard about bankruptcy. Most of it is NOT TRUE…. and we’ll prove it….right here…right now. Here are the Top 16 Myths your creditors want you to believe…and the reason why every one of them is NOT TRUE.

Myth 1: Under the NEW bankruptcy law, there’s no more bankruptcy and no more help (or it’s too late to file).

Not True. In fact…nothing could be further from the truth. Sure you heard it in the press, but it’s just not true. The news media overcooked the whole story. The truth is that you can do almost everything under the NEW law that you could do under the OLD law. In some ways, the new law actually increased the benefits of filing bankruptcy. As it turns out…and you need to hear this…many clients are getting a better break under the NEW law, than they would have received under the OLD law.

Myth 2: Everyone will know you have filed for bankruptcy.

Not True. In fact…although bankruptcy is public record almost no one will ever know.

It will show on your credit report, but when was the last time a friend asked to see your credit report?

Truth is almost no one ever finds out.

Did you know Walt Disney found of Disney Land/World and Henry Ford founder of Ford automobile filed bankruptcy?

Myth 3: You will lose everything you have

Not True. In fact…Most of our clients keep everything they own.

A chapter 7 bankruptcy has state exemptions on personal property allowing you to keep your car, household goods and most of your houses equity.

A chapter 13 bankruptcy allows you to keep pretty much everything you own.

Myth 4: You will never be able to own anything again

Not True. In fact…There are lenders out there that will lend you money to buy a house 2 years after filing a chapter 7 bankruptcy. YES, 2 years providing you have taken care on rebuilding your credit following the bankruptcy.

Want a new or used car?

YES immediately after filing bankruptcy you will be able to purchase a car providing you have income to support the purchase.

Myth 5: You will never get credit again

Not True. In fact…nothing could be further from the truth. Sure it will be slow to build your credit.

But the fact is now you can rebuild your credit.

As long as you are behind on payments you’ll never be able to get ahead and rebuild your credit.

In fact you will be able to buy a car immediately after your bankruptcy and even receive credit cards again.

As long as you take on debt you are able to afford it may build your credit.

In fact you will probably have better credit quicker if you file for bankruptcy.

Because every late payment that keeps appearing on your credit makes your credit worse and worse and worse.

STOP the creditors.

Myth 6: Filing bankruptcy will hurt your credit for 10 years

Not True. In fact…Bankruptcy in most cases will help your credit. While it is true the bankruptcy will stay on your credit for up to 10 years, you will be able to rebuild your credit immediately after your bankruptcy.

In fact 2 years after your bankruptcy you will be able to buy a house, providing you have the income and have taken steps to rebuild your credit.

The most important step is stopping the late payments and to start rebuilding your credit.

Myth 7: If you’re married…both you and your spouse have to file for bankruptcy

Not True. In fact…. You or your spouse can file bankruptcy without the other.

If you are considering filing without your spouse, please come in and speak with the attorney.

Each case needs dedicated attention and we will lay out all of your options.

Myth 8: It’s really hard to file for bankruptcy

Not True. In fact…Filing bankruptcy can be difficult if you decide to do it without the help of a bankruptcy attorney. There are many variations to each particular case and no two cases are the same.

However at the Professional Law Group we make it extremely easy.

Simply set up a free consultation, bring in the required documents and we take care of the rest.

Myth 9: Only deadbeats file for bankruptcy

Not True. In fact…Some of the most respected people in our culture have filed bankruptcy.

Donald Trump, financier
Michael Jackson, singer
Wolfgang Amadeus Mozart, composer
Elton John, singer/composer
Kim Bassinger, actress
Mike Tyson, boxer
Mark Twain, humorist
Burt Reynolds, actor
Thomas Jefferson, patriot and president
Gary Coleman, child actor
MC Hammer, rap singer
Willie Nelson, country singer
Lorraine Bracco, “The Soprano’s” actress
Charles Goodyear, inventor of vulcanized rubber
PT Barnum, circus promoter
L. Frank Baum, author of “The Wonderful Wizard of Oz”
Mathew Brady, Civil War photographer
Oscar Wilde, playwright
Jerry Lee Lewis, rock singer
Rembrandt, painter
Henry Heinz, ketchup magnate
Milton Hershey, chocolate magnate
Henry Ford, auto magnate
Johnny Unitas, football player
Wayne Newton, entertainer
Mickey Rooney, actor
Debbie Reynolds, actress
John Connally, former Texas governor
Walt Disney, creator of Mickey Mouse
Mick Fleetwood, rock singer
Merle Haggard, country singer
Ulysses S. Grant, president and Civil War general
Dorothy Hamill, figure skater
Larry King, talk show host
Bowie Kuhn, former baseball commissioner
Stan Lee, comic book creator of “Spider Man”

Myth 10: Filing bankruptcy means you’re a bad person

Not True. In fact… Bad things happen to good honest people all the time.

The current economy is not something one person did or anyone deserves.

Last year alone 1.9 million people filed bankruptcy. Did you know that these people filed?

Donald Trump, financier
Michael Jackson, singer
Wolfgang Amadeus Mozart, composer
Elton John, singer/composer
Kim Bassinger, actress
Mike Tyson, boxer
Mark Twain, humorist
Burt Reynolds, actor
Thomas Jefferson, patriot and president
Gary Coleman, child actor
MC Hammer, rap singer
Willie Nelson, country singer
Lorraine Bracco, “The Soprano’s” actress
Charles Goodyear, inventor of vulcanized rubber
PT Barnum, circus promoter
L. Frank Baum, author of “The Wonderful Wizard of Oz”
Mathew Brady, Civil War photographer
Oscar Wilde, playwright
Jerry Lee Lewis, rock singer
Rembrandt, painter
Henry Heinz, ketchup magnate
Milton Hershey, chocolate magnate
Henry Ford, auto magnate
Johnny Unitas, football player
Wayne Newton, entertainer
Mickey Rooney, actor
Debbie Reynolds, actress
John Connally, former Texas governor
Walt Disney, creator of Mickey Mouse
Mick Fleetwood, rock singer
Merle Haggard, country singer
Ulysses S. Grant, president and Civil War general
Dorothy Hamill, figure skater
Larry King, talk show host
Bowie Kuhn, former baseball commissioner
Stan Lee, comic book creator of “Spider Man”

Myth 11: Filing for bankruptcy will hurt your credit

Not True. In fact…In most situations the bankruptcy actually helps your credit.

How? Because if you are behind on payments and receive late notices, these notices hurt your credit in some cases worse than the bankruptcy.

So the longer you let them accumulate the worse your credit. Bankruptcy will stop these creditors and may eliminate some or all of your debt.

Then you can start to rebuild your credit. Many of our clients will have more damage done to their credit before they come to us than the actual bankruptcy.

Myth 12: Even if you file for bankruptcy, creditors will still harass you and your family

Not True. In fact…Once we file your bankruptcy an automatic stay goes into effect.

This makes it illegal for a creditor to call you.

If they do, they can face large fines and even be sued.

Myth 13: If you file for bankruptcy, it may cause more family troubles and may even lead to divorce

Not True. In fact…Bankruptcy will help your family.

Considering a large percentage of divorces occur because of financial difficulties, imagine if you had no debt?

Bankruptcy can give you and your family a better future by eliminating some or all of your debt.

You will then have more of your income for your spouse and your family.

What person would not want that?

Myth 14: I can’t afford bankrutpcy

Not True. In fact…You can’t afford not to file bankruptcy!

If you are reading this site, you need to take action and act quickly before a creditor garnishes your wages or takes money from your bank account.

If that happens how much money will you lose?

How much have you already spent trying to stay afloat?

What could you do if you didn’t have any unsecured debt?

We offer the most reasonable bankruptcy prices available and we offer payment plans all while offering 20 plus years of bankruptcy experience and a dedicated staff for you needs.

Myth 15: You will lose your retirement plan in bankruptcy

Not True. In fact…with the overhaul of the bankruptcy code in 2005 almost all retirement plans are protected in bankruptcy. This includes:

  • 401(k)s
  • 403(b)s
  • IRAs (Roth, SEP, and SIMPLE)
  • Keoghs
  • profit-sharing plans
  • money purchase plans, and
  • defined-benefit plans.

With a few exceptions the exempt amount is unlimited. There are a few exceptions that’s why you should call the Professional Law Group and let our 20 years of bankruptcy experience help you.

Myth 16: Bankruptcy can not help with my foreclosure

Not True. In fact…filing bankruptcy may actually save your home.  Depending on whether you file a chapter 13 bankruptcy or chapter 7 bankruptcy.  Filing either chapter will delay the sale of your home by several months, however the bank may file a motion to lift the stay.  Which essentially lets the lender continue with the foreclosure sale. If you file a chapter 13 you will work on a repayment plan with the attorney to include your house payment and any arrearages you may have.  Helping you save your home.  If you do not have the income to make the payments you may not qualify for a chapter 13 bankruptcy.  This is why it is very important you meet with a qualified bankruptcy attorney that has many years of experience.

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