Lawyer Explains Bankruptcy Myths

Bankruptcy Myths

There are many myths surrounding bankruptcy, on the internet as well as passed on from person to person.  Believing some of these could influence how you react to the subject of bankruptcy and whether you would consider it to handle your debt situation.  To avoid these confusions, it is best to deal with a professional bankruptcy attorney who can answer all of your questions with the correct information.  At the Malaise Law Firm, we have the knowledge you will need to fully discuss your options when it comes to dealing with your debt and finding out if bankruptcy is right for you.  Contact one of our firms in Corpus Christi, McAllen, Brownsville and Harlingen.

Here are a few common myths we can dispel with correct information:

You can only file for bankruptcy protection once

You can only file for a Chapter 7 bankruptcy once every 8 years. As for filing a case under Chapter 13 there is a limitation on how long after your prior one is discharged before being able to file again.

You can get rid of all of your debts through bankruptcy.

Although you can discharge quite a few types of debt, certain ones such as child support, alimony, taxes and student loans are still owed.  Exceptions for past due amounts might be able to be included in a bankruptcy.

You can't get rid of any IRS taxes in bankruptcy.

In some cases, you are able to eliminate taxes that are over 3 years old.

My credit will be ruined for 10 years.

A bankruptcy will appear on your credit history for 10 years, but your credit rating will begin to improve as time goes by and you re-establish your credit.  The late payments, any lawsuits or wage garnishments prior to your bankruptcy would have already negatively impacted your credit.

You lose everything you own with bankruptcy.

Most bankruptcies do not affect your being able to keep all of your assets.  Many assets are protected by bankruptcy laws.  In fact, the majority of people who file for bankruptcy give up none of their assets.

I will never be able to get credit again.

You can normally begin to re-establish credit right away by getting small credit cards and using them sparingly, paying them off completely each month.  This will establish a good payment record for you and will build up a good credit history once again.  You can also apply for department store cards, or gas cards, and use them in the same manner.  You will pay higher interest rates at first, but this should improve over time.

Bankruptcy myths can affect your decision on filing for bankruptcy.  Get the true data by contacting one of the bankruptcy attorneys at the Malaise Law Firm.