- Belief that bankruptcy filing will ruin credit forever – “I’ll never get credit again”. Bankruptcy filing is a serious decision and filing a petition for relief under the bankruptcy code is not a good mark to have on your credit report. Before making a decision to file, individuals should consider their overall circumstances. If there are any viable alternatives to filing bankruptcy, those should be given careful consideration. However, in a situation where an individual has open judgments, accounts in collection, high debt to income ratio and/or history of slow pay and defaulted loans, filing bankruptcy may result in a faster recovery of that persons FICO score than not filing. After a bankruptcy discharge is granted, debts are shown as discharged and not open and judgments will show as satisfied after appropriate application is filed with the circuit court.
- I’ll lose my house, cars and other assets – Most bankruptcy cases are no asset cases. In other words, the panel trustee appointed in the case will determine that there are no assets to liquidate in order to pay creditors. Generally speaking, individuals are able to keep their house, cars and other assets in a bankruptcy filing because the rules or exemption laws that determine what someone can keep when they file for bankruptcy are fairly generous.
- My friends and family will find out I filed for bankruptcy – bankruptcy filings are not published in the newspaper and are not available to the general public online so unless you tell someone you filed for bankruptcy it is highly unlikely they would ever discover your filing.
- You can’t file bankruptcy if you make too much money – This may be true in certain circumstances. When bankruptcy laws changed in 2005, Congress developed a “means test” to limit or preclude certain individuals from filing for relief under the bankruptcy code. You should meet with a qualified bankruptcy attorney to help evaluate your case under the means test to determine whether you qualify before proceeding with a bankruptcy filing.
- It is easy to file bankruptcy and I don’t need an attorney to help me – Nothing can be further from the truth. Filing for bankruptcy relief is a fairly complicated procedure that requires accurate reporting of assets, creditors and other financial disclosures. Failure to do so accurately could result in the loss of property, failure to discharge certain debts or dismissal of the case.
To find out more, contact ESSERLAW LLC for more information and for a free evaluation of your case call 410-285-5442.