| Bankruptcy
Myths
Here
are some common bankruptcy myths. We encourage you
to reference them before, during and after your bankruptcy.
For more specific questions, please contact one of our
experienced New Jersey bankruptcy lawyers at 856.429.2449
or lmpesquire@comcast.net.
MYTH
#1: People
who file bankruptcy lose all their property.
FACT:
Most debtors do not lose any property.
The majority of all cases are
administered as “No Asset” cases, meaning there are no assets that
are both non-exempt and worth enough for the estate to pay the costs of
administration.
If you do have a large tax refund or other non-exempt asset that
may be at risk, your attorney can advise you how to best protect
it.
MYTH
#2: People
who file bankruptcy never get credit again.
FACT:
Many of our clients receive offers for
credit before their bankruptcy is even finished.
We have had many clients who purchase homes within two years of
their bankruptcy.
Our firm also has a Credit Reporting Coordinator on staff to help
make sure our clients’ credit reports are as accurate and up-to-date
as possible enabling them to maximize their credit scores.
MYTH
#3: Only
deadbeats file bankruptcy.
FACT:
From experience, I can tell you that our
clients are in bankruptcy due to job loss, illness, divorce and other
economic crisis that are often not in their control.
Most debtors would do anything they can to avoid filing
bankruptcy and many have already taken out second mortgages on their
homes in an attempt to catch up.
They often simply cannot make end meet due to high interest and
late fees.
MYTH
#4: Banks
have lost a lot of money due to bankruptcy filings.
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FACT:
Bank profits from credit cards are at an
all time high of over $30 Billion a year.
If banks were truly suffering from bankruptcy losses, they would
start exercising prudence in lending instead of giving out credit cards
like candy.
MYTH
#5: Bankruptcy
“costs” each family an average of $400 a year.
FACT:
This figure assumes that debtors could pay
their bills if they did not file bankruptcy.
Banks know that debtors who need to file bankruptcy do not have
the ability to repay.
Even if they did not file bankruptcy, they would not be able to
file their debts in full.
Those profits would not be given back to other credit card users
anyway, the banks would keep them.
MYTH
#6: There
is a minimum amount of debt required to file bankruptcy.
FACT:
Theoretically you could file bankruptcy
even if you only had $500 in debt.
We have had clients with little or no income who have filed for
amounts that would be very manageable for those with a higher income.
Therefore, there is no minimum.
MYTH
#7: I
am only required to list the debt I want to get rid of on my bankruptcy.
FACT:
All debts must be listed, but you can
reaffirm debts such as your home, car(s) and other secured loans.
You can also make voluntary payments to family or medical
providers if you wish.
MYTH
#8: It
is okay to charge up your credit cards just before you file bankruptcy.
FACT:
Debt acquired after you realize you are
not able to repay may have to be paid back in full even if filing
bankruptcy.
MYTH
#9: If
you are married and file bankruptcy, your spouse must file too.
FACT:
Many married debtors file alone and the spouse is not affected.
Unless both spouses are listed on the debt, a single filing often
makes more sens
CALL NOW TO SPEAK TO AN
ATTORNEY - 856.429.2449
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