Like
most formidable situations, bankruptcy has earned its reputation
based on very few truthful facts and too many false embellishments.
The majority of the miseducation of the public has occurred since the
current bankruptcy laws went into effect in 2005. But have no fear,
once you know the facts, filing for bankruptcy is not nearly as
terrifying as it first appears. Here are some of the most common
myths about bankruptcy and what you need to know before you clean
your slate.
Myth
#1: It is difficult to file for bankruptcy.
False.
The new bankruptcy laws have drastically reduced the time it takes to
be discharged from bankruptcy down to an average of nine months. In
today’s economic landscape, it is understandable that individuals
need to file for bankruptcy in order to start over. A qualified,
experienced bankruptcy lawyer can make the process as simple and
painless as possible.
Myth
#2: You will lose everything you own.
This
one of the biggest misnomers deterring people from filing. Bankruptcy
laws do vary from state to state, but every state has exemptions that
can protect certain assets, such as your house, car, qualified
retirement plans, household goods and necessary clothing.
Myth
#3: You will never get credit again.
Quite
the opposite, actually. Before you even get home from the courthouse,
your mailbox could be rich with credit cards offers again. The catch
is that they will be from subprime lenders charging very high
interest rates. In fact, if you have a credit card with no balance at
the time you file, you may not have to include it in your list of
creditors, since you don’t owe them money. You may even be able to
keep the card after the bankruptcy is finished.
Myth
#4: If you are married, both spouses have to file.
This
one is tricky, but not entirely true. It is very uncommon for one
spouse to have a significant amount of debt in their name only. If
there are debts that a married couple wants to get discharged in
which they are both liable for, they will need to file together. If
only one spouse files for bankruptcy, the creditors usually demand
the entire payment from the spouse who didn’t file.
Myth
#5: You can only file for bankruptcy once.
You
can actually file for bankruptcy more than once, but the new
bankruptcy laws extended the amount of time in between filings.
Chapter 7 bankruptcy can be filed for once every eight years and a
Chapter 13 filing once every two years. If you want to file for both
on separate occasions, there is a four year wait in between the two
filings.
Myth
#6: Everyone will know you filed for bankruptcy.
Unless
you are a very prominent person or a major corporation and the media
gets word, the only people that will know about your filing are your
creditors. These days, the amount of people filing is so immense that
very few publications have the time, space or inclination to run
anyone’s name.
If
you are seriously considering bankruptcy and you live in New York,
you need to consult with an attorney who understands New York
bankruptcy laws. Not all bankruptcy attorneys are the same. While the
process appears complicated, a bankruptcy lawyer in New York will be
able to help you understand your options and avoid making bad
decisions. When bad things happen to good people, the New York
bankruptcy lawyers at Doyaga and Schaefer are here to help. For a
free same-day consultation, call 718-488-7500 or 516-656-7500, or
visit our website at bigapplebankruptcy.com for more information.