More Bankruptcy Myths Exposed | Birmingham Bankruptcy Attorney Blog
On behalf of Gina H. McDonald & Associates, L.L.C. posted in Chapter 7 on Thursday, September 2, 2010
The last blog post covered typical myths that Birmingham Chapter 7 bankruptcy attorneys encounter on a regular basis. There are so many, we have enough to discuss again today!
- If you’re married, both spouses must file for bankruptcy
Not true. But there’s more to say about this situation. If we’re talking about one spouse with a load of debt that is in their name only, that spouse could be the only filer. Most of the time, though, some or all of the debt that they want to discharge will be debts that both spouses are liable for. In that case they should file together. If they don’t, the creditors will simply demand payment for the entire amount from the spouse who didn’t file.
- If I file for bankruptcy, everyone will know
Bankruptcy is a public legal proceeding, so it is always possible for people to find out. However, unless you are famous or the news media have some particular reason to take an interest in your bankruptcy, it is very unlikely that anyone will find out that you’ve filed for bankruptcy except for your creditors.
- I can just max out all my credit cards and then file for bankruptcy
No – that’s fraud, and bankruptcy judges have a big problem with that. The trustee in your case will review all your purchases right before your filing, and they know what to look for.
- If I file for bankruptcy my credit rating will improve
It sure won’t. It’s the biggest negative that can appear on your report. And it will stay there for ten years.
- Only deadbeats file for bankruptcy
Not so. Most people file for bankruptcy after the loss of a job, a serious illness or a divorce. They’ve struggled to pay their bills and they’ve just kept falling further behind.
- I want to leave certain creditors out of my filing
If you want to pay back some of your creditors even after your debt to them is discharged, there will be nothing stopping you. For some creditors that you want to do business with in the future, this would make sense. But you need to list all of your creditors in your filing.
- You can’t get back taxes discharged through bankruptcy
Generally, this is true. It is possible to have some taxes discharged under certain circumstances, but you should discuss this narrow possibility with a qualified attorney.
- If I file for bankruptcy, I can never file again
It is possible to file for bankruptcy more than once, but you can only file for Chapter 7 bankruptcy once every eight years. You have to wait two years to repeat a Chapter 13 filing and four years between a Chapter 7 and a Chapter 13 case. But the idea here is right: one time through bankruptcy should be enough.
Source: Bankrate.com “12 myths about bankruptcy”
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