Top 10 Common Bankruptcy Myths
After working multiple bankruptcy cases, the experienced attorneys in Arizona at The My AZ Lawyers have heard just about every bankruptcy myth imaginable. Below are some of the most common bankruptcy myths, rumors and misconceptions that we dispel on a regular basis:
1. You will never get a credit card or loan if you file for bankruptcy.
This is absolutely untrue as many people are able to obtain credit lines and loans after they have filed for bankruptcy. Also, bankruptcies are removed from a person’s credit report after 7 to 10 years, which means that they may be able to obtain credit cards and loans if they act financially responsible in the years following their bankruptcy.
2. People who file for bankruptcy lose their homes.
Not true. Often times, people are able to avoid losing their homes by filing for bankruptcy. In fact, many people choose to file for bankruptcy in order to protect their homes from foreclosure.
3. People can only file for bankruptcy once in their lives.
This belief is completely false as people can file for bankruptcy every 8 years as long as they meet state and federal eligibility requirements.
4. I can avoid paying child support if I file for bankruptcy.
Filing bankruptcy will not alleviate a child support debt. While your unsecured debts may be discharged after you file for bankruptcy, you will still have to make your child support payments each month.
5. Filing for bankruptcy takes a long time and costs a lot of money.
This statement is false as most bankruptcy cases take 4 to 6 months. Additionally, if people do not address their debts, it will cost them more money over time than it would if they had confronted the problem and filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Most of our clients at The My AZ Lawyers are amazed at how affordable our rates are and are even more surprised when they are able to get a fresh start within a short amount of time.
6. Everyone will know I’ve filed for bankruptcy. All my friends and neighbors will know that I had to file for bankruptcy protection.
Unless you’re a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it’s true that bankruptcy is a public legal proceeding, the numbers of people filing are so massive, very few publications have the space, the manpower, or the inclination to run all of them.
7. Declaring Bankruptcy represents a personal or moral failure.
More than 90% of bankruptcy filings are traceable to job loss; illness; or divorce. These are factors largely out of anyones control. Filing Bankruptcy in Arizona is a safety value to prevent individuals from being buried by debts they can never repay. Contact our experienced Phoenix and Tucson Bankruptcy Lawyers, we will evaluate your financial situation through a free debt evaluation.
8. I am stuck with my medical bills as they can’t be discharged in bankruptcy.
A variation on this myth is that “you can’t discharge credit card debt in bankruptcy.” This has the sound of: “law as described by bill collectors”. Almost all unsecured contract debt, such as credit cards, personal loans, and medical bills, remain dischargeable by filing for bankruptcy in Ariaona. Find out which of your debts are completely dischargable by contacting us today. Our low cost bankruptcy lawyers will assist you with your financial woes.
9. There is a minimum amount of debt required to file bankruptcy.
ona Bankruptcy law does not set any minimum amount of debt necessary to file for protection under the bankruptcy code. Are you drowning in debt? If the debt that you have appears to be beyond your ability to pay, you can elect to file bankruptcy. Filing for bankruptcy with one of our low cost Tucson and Phoenix, Arizona bankruptcy attorneys represents a smart choice in both your personal and financial situation.
10. If I File Bankruptcy, I Will Lose Everything I Have.
Nothing could be further from the truth. Usually you can keep your property if you choose to file for bankruptcy.
Certain property is called “exempt” (that means protected) assets. You are allowed to keep those items that are exempt when filing for bankruptcy protection. The concept behind exempt items is that you will need certain basic items in order to make a successful fresh start after declaring bankruptcy.