Tampa Bankruptcy Attorneys
1. I WILL LOSE EVERYTHING IF I FILE BANKRUPTCY.
FALSE! Bankruptcy allows you to KEEP your property, either by making payments to catch up debt in a chapter 13, or by protection of law in chapter 7 (these are called exemptions). If you are behind on payments to creditors, you are more likely to lose your property outside of Bankruptcy, through repossession, foreclosure, judgments or garnishment. Bankruptcy puts a stop to all collection efforts.
2. PEOPLE WILL COME TO MY HOUSE AND LOOK AT/TAKE MY STUFF.
FALSE! As part of your Bankruptcy case, we are going to file a list of all your assets. You are going to sign the papers under oath, saying you swear that this is a true list of your personal property. In most cases, that’s it. If the trustee has questions about certain higher value assets, they may send an appraiser, but it would be set up in advance – no sneak attack or surprise visit.
3. IT’S HARDER TO FILE BANKRUPTCY SINCE THEY CHANGED THE BANKRUPTCY CODE IN 2005.
FALSE! You can still file Bankruptcy, the new code just changed whether you can file a chapter 7, 13, or 11. As long as you make below the average (median) income in the state of Florida, you can file chapter 7. If you make more than the average, you will have to file chapter 13 unless there are unusual circumstances, in which case you may still be able to file a chapter 7.
4. I HAVE ALREADY FILED BANKRUPTCY, I CAN NOT FILE AGAIN.
FALSE! If you filed Bankruptcy before but did not complete it (did not get a discharge order) then you can file again, just let the attorney know that it is not your first filing. If you have filed before, there are time limits before you can file again. If you previously filed a Chapter 7, you have to wait 8 years to file again if you filed a chapter 13 it’s much less – 2 to 4 years.
5. I HAVE TO PAY BACK ALL MY CREDIT CARDS IN CHAPTER 13.
FALSE! You only have to pay back what you can afford to pay, with a few exceptions. Your payment in Chapter 13 will have to cover your secured debt (i.e., car loans, mortgages), the trustee’s fee, and attorney’s fee (if any is included in the plan). If you can afford to pay more than that amount, then your credit cards and unsecured debt will get paid something. If not, too bad for them! They will have to be satisfied with what you have available to pay.
6. I WON’T BE ABLE TO BUY A HOUSE/CAR OR GET ANY CREDIT FOR A LONG TIME.
FALSE! You can borrow money during a chapter 13 case with court permission. People refinance their homes and/or purchase new cars while in Bankruptcy all the time. The Bankruptcy will stay on your credit report for 10 years, but you will certainly be able to rebuild your credit by paying your secured debt on time and paying your plan payments if you file a chapter 13. You most likely will get credit card applications in the mail while your case is still pending! You may not get the same interest rates as before, but credit will be available. I had a client who purchased a house a year after getting his chapter 7 discharge, and another who had a credit score in the 600s while she was still in her chapter 13 Bankruptcy.
7. I’M MARRIED, AND MY SPOUSE IS NOT ALLOWED TO FILE RIGHT NOW, SO I CAN’T FILE EITHER.
FALSE! Spouses are not required to file Bankruptcy together unless that’s what they want. If one spouse has filed and is not eligible to file now, the other spouse can file alone.
8. EVERYONE WILL KNOW THAT I FILED BANKRUPTCY.
FALSE! Bankruptcy is public record, but unless someone is checking Bankruptcy filings, no one will know except your creditors. It is not published in the newspaper, and you are not put in shackles in the middle of town – there is NO debtor’s prison!
9. YOU CAN’T GET RID OF INCOME TAX DEBT TO THE INTERNAL REVENUE SERVICE IN A BANKRUPTCY.
FALSE! Well, at least some of the time. You have to have filed all of your tax returns, and the debt has to be at least 3 years old.
10. I AM A BAD/IMMORAL PERSON IF I FILE BANKRUPTCY
FALSE! The whole reason the Bankruptcy law was put in place was to give people a fresh start. In this economy, lots of people are losing their jobs and getting behind on debts. Divorces and medical issues are also leading causes of Bankruptcy. These are things outside your control – no one plans to lose a job an end up in foreclosure! This does not make you a bad person – this makes you a person who realizes that you need some help and want to get your life back on track.