Sacramento Bankruptcy Myths Part 1
There are many myths surrounding bankruptcy. Some bankruptcy myths are designed to scare people away from bankruptcy, while others misinform the public about the negative aspects of bankruptcy. Overall, bankruptcy can have very positive outcomes for individuals in financial difficulty, and many of the negative effects of bankruptcy can be alleviated by a skilled bankruptcy attorney.
Myth #1 – I will lose all of my property in bankruptcy
You will not lose all of your property in bankruptcy. In chapter 13 bankruptcy you retain all of your property and repay a percentage of your debts through a repayment plan. In chapter 7 bankruptcy your non-exempt property is subject to liquidation, but many types of property can be exempted. When property is exempted in chapter 7 bankruptcy it is not subject to liquidation and can be retained by the debtor in bankruptcy. For instance, when you exempt 100% of your IRA in bankruptcy it cannot be liquidated in bankruptcy. Consequently, you will not lose exempt forms of property in chapter 7 bankruptcy.
Myth #2 – You will never get credit again
After you complete your bankruptcy many, many lenders will offer you credit. While the interest rates may be higher due to your recent bankruptcy, credit will be available. Furthermore, due to the mandatory waiting periods between bankruptcy filings certain lenders will be more confident extending credit to you post bankruptcy.
Myth #3 – You can only file for bankruptcy once
This is simply not true. There is no limit to the number of times you can file for bankruptcy. However, there are waiting periods between bankruptcy filings. You must wait 8 years between chapter 7 bankruptcy filings.
Myth # 4 – You have to be broke to file for bankruptcy
There is no minimum amount of debt required to file for bankruptcy. Insolvency is not required. You could file for bankruptcy with $200 of debt, or $100, or $50, etc. However, you should always keep in mind the waiting period between bankruptcy filings and your likelihood of incurring more debt in the near future before filing for bankruptcy with low levels of debt.
Myth #5 – Filing for bankruptcy is just filling out forms
Filing for bankruptcy is not that easy. When you hire a Sacramento or Roseville bankruptcy lawyer you are not paying for the simple act of data entry; you are paying for the legal knowledge required to correctly complete the bankruptcy petition, schedules and statements. You are also hiring a skilled representative to protect your interests throughout the bankruptcy process. To be sure, anyone can download the required documents and “fill in the blanks,” but the costs of incorrectly completing these documents include dismissal of your case, litigation, and denial of discharge for some or all of your debts. In light of the seriousness of bankruptcy proceedings many petitioners choose to hire a bankruptcy lawyer.