Common Myths And Lies About Consumer Bankruptcy
November 3, 2022
Man good folks who are deep in debt avoid or defer filing for Bankruptcy. Why? They hear and read lot of misinformation and lies.
Special interest groups such as banks fight against filing Bankruptcy. Why? If they can prevent you from filing bankruptcy or delay it they will able to squeeze more money out of you.
Bankruptcy is a serious matter. The best way to find out what is best for you: talk to a lawyer.
Consumer Bankruptcy lawyers generally offer Complimentary and confidential advice. I know that our firm, Robert J. Adams & Associates does. We do this every day. And, we are here to help you now.
BANKRUPTCY ARE FOR PEOPLE WHO DON’T WANT TO PAY THEIR BILLS
Almost all our clients have tried to work out payment plans with their creditors. Most creditors are inflexible. They want their money and they want their money now. The laws outside of bankruptcy favor creditors. They can:
- Sue you;
- garnish wages and bank accounts;
- harass you and your family;
- Seizes your property.
- Lower your credit scores. Makes life more difficult for you.
YOU CAN ONLY FILE BANKRUPTCY IF YOU ARE BEHIND ON YOUR BILLS
You don’t have to be behind on your bills. Good people juggle their bills and wind up hurting themselves. The debts keep growing and they deprive themselves of a decent living.
MARRIED COUPLES HAVE TO FILE BANKRUPTCY TOGETHER
False. It depends on your circumstances. One spouse can file Chapter 7 or Chapter 13 and the other spouse not file.
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:
Personal Property Exemptions In Illinois For Chapter 7 And Chapter 13
Homestead Exemptions In Illinois
WHAT IF THERE IS EQUITY IN MY HOUSE?
Our law firm has been able to file Chapter 7 even if there is some equity. Or, if too much, a low dividend Chapter 13 is possible.
If this is a problem or concern it best to talk to a lawyer like our office, ROBERT J. ADAMS & ASSOCIATES. The call is Complimentary.
BANKRUPTCY CAN ACTUALLY SAVE YOUR PROPERTY
Bill collectors will say you can’t file bankruptcy. Or, they will claim you will lose their property.
Car finance companies have liens on cars. If you fall behind they car repossess your car. Chapter 13 can save your car. You pay the balance over a period of 3 to 5 years and usually at a much lower interest rate.
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.
It is not a failure. It realizing that you have to save your financial live. You will go forward with your needs and that of your family.
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.
After filing bankruptcy are clients see their credit scores rise.
FILING FOR BANKRUPTCY IS DIFFICULT OR NOT POSSIBLE
Bankruptcy lawyers know obstacles and traps in the law. They know how to have navigate through the bankruptcy laws.
The credit industry puts out “fake news” that you can’t file bankruptcy. Bankruptcy lawyers know the do’s and don’ts of law; and what you do and can’t do. Generally, their advice is Complimentary: take advantage of them. Our law firm, ROBERT J. ADAMS & ASSOCIATES provides Complimentary advice on a daily basis.
ARE ALL DEBTS ARE ELIMINATED & DISCHARGED IN CHAPTER 7?
Certain debts are not eliminated through Chapter 7. Some examples include:
- Most student loans;
- Parking and red light tickets;
- toll way fines;
- Some (but not all) income tax debts
- back child support.
Also, there are debts where there are liens like cars and homes if you wish to keep them.
Sometimes a Chapter 13 is better than a Chapter 7 for you.
Bankruptcy lawyers generally offer Complimentary advice: take advantage of them. Know your rights.
YOU CAN ONLY FILE BANKRUPTCY ONCE
False. There are certain time limits for Chapter 7. But, Chapter 13 is always available.
For a more in-depth look at the time limits go to:
EVERYONE WILL KNOW I FILED BANKRUPTCY
In the Chicago area the Chicago Law Bulletin lists all recent bankruptcy filing. Only certain professional read this section of the paper. Neither your friends nor neighbors read the Law Bulletin list of 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 the income to go past the initial part of the test. Even if your income is higher than the Means Test, there are ways around it. There are many deductions allowed. Experienced lawyers have defeated or lessened the effects of the Means Test.
A fuller explanation go to:
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. Our law firm, Robert J Adams & Associates concentrates in Consumer Bankruptcy. And, our advice is Complimentary.
BANKRUPTCY STOPS YOU FROM GETTING NEW CREDIT
Credit scores rise after filing Chapter 7.
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 hear from past clients who are now 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 will be discharged.
There a rules on what can and cannot be discharged. Experienced lawyers know these rules.
If you want more information go to:
Experienced lawyers can help you find the best path in our bankruptcy laws.
Debts to the IRS that are not dischargeable can usually be paid through Chapter 13. After filing Chapter 13 future interest and penalties stop.
For the most part student loan debts are not dischargeable in Chapter 7 or in Chapter 13.
If you file Chapter 13 collections will stop until the end of the case.
CHAPTER 13 REQUIRES THAT YOU PAY ALL YOUR BILLS BACK IN FULL
Not true. Most of our Cheaper 13 clients pay a small dividend to unsecured creditors. 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.
Disclaimer: Blogs on legal matters are for information purposes only and is not to be construed as legal advice.
For more information on Common Myths about Consumer Bankruptcy, call today.