TOP BANKRUPTCY MISCONCEPTIONS
It’s safe to say that no one wants to file for bankruptcy.
Deciding it’s something you must do is incredibly painful, humbling and
embarrassing. Often the hardest part is committing to retaining a bankruptcy
attorney and the recovery or financial healing process.
From what I have seen, the most common causes of financial
hardship is the loss of a job, divorce, death of a spouse or being sued. Rarely
has someone retained me and filed because of medical bills. Doctors almost never
sue you to collect, credit cards companies sue often.
Once a debtor realizes and decides they must file
bankruptcy, they consult with Mr. Turner. Afterward, they express relief and
are confident the decision is the right one. They understand bankruptcy is not
“the end,” but rather the beginning. The beginning of financial recovery,
reduced stress a fresh financial start for the debtor and their family, a much
needed and well deserved second chance.
The financial and emotional healing has begun, the embarrassment
dissipates, and they realize the misconceptions and stereotypes perpetuated by
the media and the credit card companies is foolish. Bankruptcy is not a
“necessary evil” but a God-send to those drowning in debt.
Once the debtor understands that often they have paid the
credit card companies more money than they have ever borrowed, the decision is
a no-brainer. Keep in mind that Bankruptcy is a right The United States
Government has given to you. Take full advantage of any rights the government
provides its citizens. Do not let people who do not have to live with the
consequences of their decisions and opinions persuade you to pay for the debt
you cannot afford or use “debt settlement companies” that rarely work. You have
earned the right to a fresh start.
Below are some common questions Clients ask me when
considering filing for bankruptcy protection
1. Will I ever get
credit again after I file for bankruptcy?
Of course, you will. The lenders want you back in debt. They
know you can’t receive another discharge in bankruptcy for several years. You
will receive offers of credit cards often before you’re out of bankruptcy. I
receive letters often from car dealerships asking my clients to call them for a
new car loan. Getting into debt is easy. Getting out is the hard part.
Should you apply for loans? Maybe. My suggestion is to be
very careful. Maybe take out a “secured loan” at their bank. Use your money and
not someone else’s. Rebuild your credit wisely. If done right, you can have a
good credit score within 24 months.
2. Will bankruptcy
affect my credit score?
For some, not at all. Most debtors were already delinquent
on their debt, facing foreclosure, garnishment, lawsuits, and repossession.
Bankruptcy improves their financial position and their credit score. Typical
your credit score is used to get credit. Creditor rather debt from the loan was
the problem. Don’t get caught up in your credit score. Focus on your liquidity.
How much money do you have left over every month now that the debt is gone?
Save that money and increase your net worth.
3. Will I lose my
car, house, retirement or other assets as a result of filing for bankruptcy
protection?
Most of the time NO. The Bankruptcy Code allows you certain
exemptions which can get tricky and complicated. You need to consult with an
experienced bankruptcy lawyer to determine how to proceed. Often debtors ask
with me too late, they have sold assets or liquidated retirement accounts
needlessly. They wasted away what money they had left that I could have protected,
and they could have kept.
Sometimes clients retain me but do not file bankruptcy for a
year or so. Planning and timing can save your house, retirement and thousands
and thousands of dollars. It could be the difference between filing a Chapter 7
and getting a discharge in 80 days while paying nothing and keeping all your
assets versus being in Chapter 13 for five years and spending thousands of
dollars.
Most bankruptcy attorneys will provide an initial
consultation for free. Please take advantage of that and utilize their
knowledge.
4. Will my friends,
family or employer find out about my bankruptcy?
Probably not, unless you owed them money. Although
Bankruptcy filings are public record, they are difficult to locate. The average
person will not be able to find your petition. Even if they do, so what.
Bankruptcy means you have discharged your debt and are in a
better financial position than you were.
5. Can I file
bankruptcy if I am employed, unemployed or retired?
Absolutely! Your employment status will not affect your
ability to file for bankruptcy protection. Although, your income may change
what Chapter you file, 7 or 13. You can ask for bankruptcy protection whether
you’re working or not.
I hope you have found this helpful and if you need an
experienced bankruptcy lawyer, I hope you consider retaining The Law Office of Tony Turner.
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