COMMON MYTHS ABOUT CONSUMER BANKRUPTCY AND ACTUAL FACTS ABOUT CONSUMER BANKRUPTCY
Man good folks who are overwhelmed in debt avoid or defer filing for Bankruptcy based on misinformation and, untruths. There are many special interest groups such as banks who rail against filing Bankruptcy. Why? If they can prevent or an individual from filing they can squeeze you for more money.
BANKRUPTCY IS FOR THOSE WHO JUST DON*T WANT TO PAY THEIR BILLSAlmost all our clients have tried to work out payment plans with their creditors. Most creditors are just inflexible. They want their money and they want their money now. The laws outside of bankruptcy strongly favor creditors. They can sue; garnish wages and bank accounts, harass you and your family, in some cases seizes your property. They send reports to credit bureaus that lower your overall credit scores to make life more difficult.
YOU CAN ONLY FILE BANKRUPTCY IF YOU ARE BEHIND ON YOUR BILLSThere is no requirement that one be in arrears on bill. Many good people are current on their bills by juggling their bills and depriving themselves of a decent living.
MARRIED COUPLES HAVE TO FILE BANKRUPTCY TOGETHER.False. Depending on circumstances one spouse can file Bankruptcy (Chapter 7 or Chapter 13) by themselves
YOU CAN LOSE YOUR PROPERTY.For most folks that*s not a problem. Illinois state law allows exemptions.
If you have concerns I have a full article on the subject:
Even if one has some equity in their home over and above allowed exemptions a Chapter 7 is still possible; or, if need be, a low dividend Chapter 13.
If this is a problem or concern it best to talk to a lawyer like our office, ROBERT J. ADAMS & ASSOCIATES. The call is free
BANKRUPTCY CAN ACTUALLYSAVE PROPERTYCreditors and/or collection agencies will frequently tell people that they can*t file bankruptcy or if they do they will lose their property.
Car finance companies have liens on cars. If you fall behind they car repossess your car. Chapter 13 is a way of saving your car and pay the balance over a period of 3 to 5 years and usually at much lower interest.
If you are behind on your mortgage and even if there is a foreclosure you might file Chapter 13. The arrears (the amount needed to be current) can be repaid over a period of 3 to 5 years.
BANKRUPTCY IS AN ADMISSION OF FAILURE OR IS IMMORAL OR UNETHICAL.Millions of Americans have filed bankruptcy. It can give them a fresh start and a way to build a new more secure life. The use of our Bankruptcy laws has saved property like cars, homes, and businesses.
Close to 2% of Americans have found relief through our American Bankruptcy laws.
Rather than a failure, it is an admission that their financial life has to be saved and to go forward with the needs of themselves and their families.
BANKRUPTCY IS THE END OF THE ROAD.Really? Was it the end of the road for Henry Ford, Walt Disney, the Chocolate King: Milton Hershey? They built empires after filing for Bankruptcy.
Our current President has had at least five (5) of his businesses file for bankruptcy. He brags that he is a multi-Billionaire.
Almost immediately after filing bankruptcy our clients start to see their credit scores rise.
FILING FOR BANKRUPTCY IS DIFFICULT OR NOT POSSIBLE.Skilled lawyer who concentrate in Consumer Bankruptcy know the obstacles and hidden traps when you are faced with bankruptcy. Skilled lawyers know how to navigate through the bankruptcy laws.
The credit industry puts up a lot of *fake news* that you can*t file bankruptcy. Experienced Bankruptcy lawyers can advise you as to what you can do and not do. Generally, their advice is free: take advantage of them. Our law firm, ROBERT J. ADAMS & ASSOCIATES provides free advice on a daily basis.
ALL DEBTS ARE ELIMINATED AND DISCHARGED IN CHAPTER 7.That may not be true in all cases. Certain debts are not eliminated through Chapter 7. Some examples include most student loans, parking and red light tickets, toll way fines, and some (but not all) income tax debts, and back child support.
Also, there are debts where there are liens like cars and homes if you wish to keep them.
Experienced lawyers concentrating in Consumer Bankruptcy are in the best position who to handle an individual*s debt s structure. For instance, Chapter 13 might get you out of all your debts in a period of 3 to 5 years.
Their advice is free: take advantage of them. Know your rights.
YOU CAN ONLY FILE BANKRUPTCY ONCENot true. While there are certain time limits there are usually ways to obtain bankruptcy relief if need be.
For a more in-depth look at the time limits go to:
EVERYONE WILL KNOW I FILED BANKRUPTCYIn the Chicago area the Chicago Law Bulletin lists all recent bankruptcy filing. Essentially, only certain professional read this section of the paper. Neither your friends nor neighbor s even read this paper or look at the list of bankruptcy filings.
I MAKE TOO MUCH MONEY TO FILE BANKRUPTCY OR I DON*T MAKE ENOUGH MONEY TO FILE BANKRUPTCY.Congress has imposed a Means Test for filing Chapter 7. Only a small number of people have sufficient income to go past the initial part of the test. For those who income exceeds certain monthly income there is a multitude of deductions permitted by law. Our law firms like other experienced Consumer Bankruptcy lawyers have defeated the Means Test on a regular basis.
A fuller explanation can be found at the following:
Individuals with modest income including social security and retirement income can file Bankruptcy. Most lawyers in the Chicago area provide payment plans that can fit your budget.
If you have questions or concerns talk to a lawyer who concentrates in Consumer Bankruptcy, such as our firm: ROBERT J ADAMS & ASSOCIATES.
BANKRUPTCY STOPS YOU FROM GETTING NEW CREDIT.This is a common misconception.
After filing Chapter 7 or completing Chapter 13 individuals credit scores start to rise. Many of our past clients now have credit scores in the 700*s.
Many of our clients have bought and financed a car few days after filing Chapter 7.
We frequently hear from past clients who are homeowners.
YOU CANNOT DISCHARGE INCOME TAX DEBTS (IRS)This is a common misconception. Generally, Income Taxes that are more than 3 years old from the date due can be discharged.
There are certain rules to determine what Income tax debts can be discharged and what cannot be discharged.
A fuller explanation on the rules can be found at:
Lawyers who have experience in Consumer Bankruptcy can help you determine the best way to handle your IRS debts.
Debts to the IRS that are not dischargeable can frequently paid through Chapter 13. After filing Chapter 13 future interest and penalties stop.
STUDENT LOANSUnfortunately, most student loan debts are not dischargeable in Chapter 7 or in Chapter 13.
When one files Chapter 13 the Student Loan creditors will not attempt collection until after the case is over.
CHAPTER 13 REQUIRES THAT YOU PAY ALL YOUR BILLS BACK IN FULLThe vast, vast majority of our Chapter 13 clients pay general unsecured creditors (like medical bills, credit cards and pay day loans) a very small fraction of what is owed. Most pay only 10% or less.
IS IT WISE TO CASH OUT A 401(K); PENSION, OR IRA BEFORE FILING BANKRUPTCY?The answer is NO: No: No
Qualified pension plans are exempt from attachment when one files for Bankruptcy relief.
If you *cash* out a qualified pension plan you convert an exempt property into to a non-exempt property.
In other words you could lose your money.