Get the Facts About Filing for Bankruptcy
Don’t be Misled by Common Bankruptcy Myths
There are many misconceptions and myths about bankruptcy that credit card companies and bankers want you to believe. At CBG Law Group, PLLC, we talk to people every day who are struggling with personal debt but are afraid of what bankruptcy will do to their financial future.
We invite you to learn more about some of the myths about bankruptcy on this page. Of course, each person’s financial circumstances differ, so make sure you talk to an experienced bankruptcy lawyer about your own circumstances. Contact us to arrange a free consultation with attorney Darrel Carter. Let us arm you with the facts so you can make an informed decision for your family.
Myth: You will lose your house
Fact: In most cases, you can keep your mortgage, car loan and other secured loans you agree to continue paying. By “reaffirming” your loan, you agree to continue making regular payments on time. In some cases, however, it may be to your financial advantage to include your house or car in the bankruptcy and let the property go back to the bank.
Myth: You will never get credit again
Fact: By applying what you learn in the required credit counseling and financial management classes, you can begin rebuilding your credit rating immediately. While your bankruptcy proceeding is moving forward, you may not have access to credit cards and will not be allowed to increase your debt with loans. Most people’s credit worthiness begins to improve within two or three years after filing. After 10 years, the bankruptcy will be removed from your credit rating.
Myth: Very few people qualify to eliminate their debt through Chapter 7
Fact: Congress made the requirements for eliminating debt through Chapter 7 bankruptcy tougher with the new bankruptcy laws of 2005, but many people still qualify.
Myth: You can’t include all of your debts in bankruptcy
Fact: Chapter 7 bankruptcy has some limitations on the type of debt you can eliminate, including student loans. All types of debt, however, can be included in a restructuring plan filed under Chapter 13.
Myth: You can’t eliminate your tax debt through bankruptcy
Fact: After meeting certain requirements, federal and state tax debt can often be eliminated through Chapter 7, Chapter 13 or Chapter 11 bankruptcy, or by applying for Currently Not Collectible (CNC) status. There are options other than bankruptcy for tax debt-relief, including offers in compromise and installment agreements.
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If you are looking for a fresh start from your personal debt or tax burden, get straight answers from an experienced bankruptcy and tax lawyer. Contact us today. From our offices in Bellevue, we represent individuals, families and business owners throughout the Bellevue region and western Washington.