Bankruptcy Folklore and Other Tales of Fantasy

Many people stay away from filing for bankruptcy because of inaccurate information from friends, family, co-workers and the media. This misinformation usually stops people from seeking the assistance of a bankruptcy lawyer who can help them understand how bankruptcy can help. The following is a list of common concerns and myths that have stopped many people from seeking the help of a bankruptcy attorney.

BANKRUPTCY CONCERNS:

1. Can I keep my home if I file for bankruptcy?

If you are current on your mortgage payments and there is no equity in your home, then generally you can keep your home when you file for bankruptcy. If you are behind in your mortgage payments then Chapter 13 bankruptcy may be available to help you catch up on your payments and keep your home.

Even when your home has equity in various instances, some if not all of the equity can be protected in a bankruptcy.

2. Can I keep my car if I file for bankruptcy?

If you are making payments on your vehicle, in the majority of instances, as long as you continue to make payments on your vehicle and sign a reaffirmation agreement, you will generally keep your vehicle. If your vehicle is paid in full, in a number of circumstances the equity in your vehicle can be protected.

3. Will my credit be ruined for the next 10 years if I file for bankruptcy?

Although a Chapter 7 and 13 can legally remain on your credit report for 10 years, this does not mean your credit will be ruined for the next 10 years. Most people are able to get their credit score to a good level after only 3 years.

4. Will my clothes, furnishings, and household goods be taken away if I file for bankruptcy?

In the majority of cases, your household goods and furnishings will not be touched by the bankruptcy court or your creditors. These items are generally protected by California bankruptcy exemptions which stop creditors from taking them to satisfy your debts.

5. If I file for bankruptcy and get a discharge, will they be able to ask for payment in the future?

If you provided accurate and non-fraudulent information on your bankruptcy petition and obtained a discharge from the bankruptcy court, afterward creditors cannot seek to collect on any debts that were discharged, once the case is closed.

6. Will I be able to obtain credit after I file?

Most people have no problem obtaining credit cards after bankruptcy. In fact there are companies that cater specifically to extending credit to people who have filed bankruptcy.

7. Is it unethical or immoral to file for bankruptcy?

Federal bankruptcy law was created specifically to help people when they cannot afford to pay their debts. There is nothing unethical or immoral about using federal law to legally eliminate your debts.

8. I understand I will not be able to purchase a home if I file for bankruptcy?

Generally most individuals who have filed for Chapter 7 bankruptcy are able to qualify to purchase a home after 3-4 years. In Chapter 13 bankruptcy, you will have to seek the permission of the court if your bankruptcy case is still pending.

9. I recently moved to California, do I have to file for bankruptcy in the state I moved from?

Federal venue rules allow you to file for bankruptcy where you have resided for the greater part of the 180 days prior to filing for bankruptcy. This means you can have resided in California for as little as 91 days and still file for bankruptcy in California

Please note by reading the information above & herein, no attorney-client relationship has been created. The information provided herein is not to be relied upon as legal advice for your specific legal needs. Should you have legal questions contact The Law Offices Morton J. Grabel in Temecula at (951) 695- 7700. Grabel, originally from Philadelphia PA, attended an ABA Law School, has an MBA, a Real Estate Broker's License, a CA Nursing Home Administrator's License and is a member in good standing of various local Chambers of Commerce.