Bankruptcy Myths

A Bankruptcy Lawyer Corrects Myths about Bankruptcy

Each of the following statements about bankruptcy is a myth.  If you are wondering about other things you have heard about bankruptcy, contact a bankruptcy attorney at Price Law Group.

Congress has made it impossible to file bankruptcy.

This is false.  The new law made it so that you must pass a means test to qualify for Chapter 7.  Our attorneys can help you know if you pass and many do.  If you do not qualify for Chapter 7, you may find Chapter 13 workable where you get bankruptcy protection while you pay off your debts over three to five years.

You cannot file bankruptcy if you have a job.

This is a myth.  To discharge all of your debt under Chapter 7, it is true you must pass a means test.  Many with jobs pass easily.  As far as Chapter 13 is concerned, you must have a job to qualify.

You lose all of your property in bankruptcy.

No.  When you file for discharge under Chapter 7, you may keep property exempt from execution in your state.  This includes basic clothing, furniture, household goods, a car of modest value, tools of your trade, home equity up to a specified amount and other items.  Under Chapter 13, you keep everything.

Credit Card Obligations cannot be discharged in bankruptcy.

Nonsense.  They surely can.

You cannot get credit after filing for bankruptcy.

No, this is not true.  Once you get a discharge from bankruptcy, lenders realize that you no longer have competing obligations and are willing to give you credit.  At first the interest rates will be high but after you show you are responsible, the interest rates will fall and available credit will go up.

You cannot dispose of medical bills in bankruptcy.

No. They may be discharged.

You cannot handle back taxes in a bankruptcy.

It is true they cannot be discharged in Chapter 7.  Nevertheless you may include them in a Chapter 13 filing where pay off all of your debts over a three to five year period.  Once you complete the payment plan, the court will discharge any remaining amounts you owe.

If you have further questions, contact a bankruptcy attorney at the firm. 

Contact a Bankruptcy Lawyer at the firm with your questions about bankruptcy.