Bankruptcy Myths

10 Myths About Bankruptcy

Most people have at least some incorrect information about bankruptcy. Many myths and irrational fears hold people back from utilizing the very helpful Process of Bankruptcy. Our Law Firm hopes that by dispelling some of these widely held myths, we can help you to determine whether bankruptcy is the right course for you. The initial consultation with a bankruptcy attorney is free. You owe it to yourself to Contact Us.

Myth I: Bankruptcy is difficult.
While there are many rules in bankruptcy, and the process may seem confusing, it is not so difficult that you should avoid the benefits bankruptcy can afford you. One of the more important elements an attorney provides is ensuring you are properly Preparing for a Bankruptcy petition. If you have a competent lawyer representing you, the process should be straight forward.

Myth II: If I file, I will lose all my property.
Because of several exemptions built into the Bankruptcy Law, most people who file for bankruptcy protection do not lose any property at all. Those with substantial property can usually keep their property if they agree to pay back some or all of their debt.

Myth III: If I file, I will never get credit again.
It is possible to rebuild your credit within months of filing bankruptcy. In many cases, clients report having an easier time obtaining credit after the bankruptcy freed them from so much debt. In a Chapter 13 Bankruptcy petition, building credit is more prolonged process, however, it still can become much easier after bankruptcy discharge.

Myth IV: If I file, I will lose my Pension, IRA, or 401(k).
In Maryland, these assets are exempt. You will keep your pension, IRA,
and 401(k) in a bankruptcy petition.

Myth V: If I file, I will lose my job.
In many cases, employers will not find out about the bankruptcy, unless you choose to tell them. Either way, employers are not allowed to fire someone (or take any other adverse action) for filing bankruptcy.

Myth VI: My bankruptcy will hurt my spouse's credit.
When one spouse files for bankruptcy protection, his or her spouse's credit is generally not affected. The Affects of Bankruptcy on the spouses credit, however, will be directly related to how mutual debts are treated by the non-filing spouse. Generally, in joint credit obligations where one spouse is filing and the other is not, those mutual debts must still be paid by the non-filing spouse to protect credit ratings.

Myth VII: Bankruptcy will not allow me to pay the debts
I want to pay.
As a general rule, nobody will stop you from paying a debt you need to pay to retain property.

Myth VIII: Bankruptcy will not help me because I owe taxes.
While it is true that some taxes will not be discharged, others can be. There are many rules which an Attorney can explain to you.

Myth IX: Filing bankruptcy will take too long.
The total time for a Chapter 7 Bankruptcy without complications is as little as four months. However, the debtor receives the benefit of an automatic stay immediately after the petition is filed. The automatic stay means that creditors are generally not allowed to attempt to collect any debts from the debtor. The phone calls from creditors should end immediately after filing.

Myth X: Only deadbeats file bankruptcy.
Congress didn't create the bankruptcy laws to help bad guys. The laws are there to help people get out of problems honestly. When good people have serious financial problems, they owe it to themselves and their families to consider bankruptcy. The Legal Services offered by the Law Firm of Wampler, Souder & Sessing L.L.C. are designed to help good people just like you to find relief under the United States Bankruptcy Code. Please contact our offices at (301) 881-8895 or use our no obligation Inquiry Form to learn more about how our bankruptcy services can bring you the relief you need.