Myths About Your Sugar Land Bankruptcy

You cannot file bankruptcy anymore

Not True.  The truth is that you can do almost everything under the NEW law that you could do under the OLD law.  There are a few more hoops to jump through, but you can still file bankruptcy.  We’re here to help you navigate the changes. 

Everyone will know you have filed for bankruptcy.

While it's true that your bankruptcy is a matter of public record, there are so many bankruptcies filed that unless someone is specifically trying to track down information on you, it is unlikely that anyone will even know you filed. The chances are very good that the only people who will know about a filing are your creditors and the people who you tell.
 

You will lose everything you have.

In Texas,  generous exemptions (property that you cannot be forced to sell to satisfy your creditors) are available that protect property such as your house, your car, your truck, household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, wages, and other property. There is even a "wildcard" exemption that can be applied wherever you want it under certain circumstances.  In those rarer situations where you have more property than can be protected by available exemptions...there is Chapter 13. In Chapter 13...you can even keep this property by paying a higher Chapter 13 plan payment.

If you want to keep a car, truck, home or other property that serves as collateral for a loan....you need to keep paying on the debt. If you make these payments and have exemptions to cover any value above what is owed, you will be able to keep these items.

You will never be able to buy anything again.

This is completely false. In the future you can buy, own and possess whatever you can afford.  The interest rate on purchases may be higher for a while, but, if you are careful and keep paying your bills, the quality of your credit will get better .

While it is true that bankruptcy is reported on your credit report for 10 years, just because something is reported on your credit report does NOT necessarily mean it will have a negative effect on your credit standing.  It is up to each individual potential lender to assess your credit worthiness and a bankruptcy is just one thing that they look at.

Only deadbeats file for bankruptcy.

Not true. Most of the people who file bankruptcy are good, honest, hard-working people who file as a last resort, after months or years struggling to pay bills left over from some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or some family emergency--or because they honestly and mistakenly overextended themselves and need to learn how to budget or manage money.

Sometimes people fall on hard times and sometimes the money's just not there. The bankruptcy laws were created to make sure you have a way, if need be, to get free from the burden of debt so that you and your family can have a second chance at a "fresh start".

Filing for bankruptcy will hurt your credit.

By the time you come to a bankruptcy attorney your credit is already either messed up or maxed out. And if it's already messed up or maxed out how can bankruptcy hurt it?  Bankruptcy can be the first step in the process of re-building your credit.

Even if you file for bankruptcy, creditors will still harass you and your family.

This is NOT true. The minute you file bankruptcy, the Bankruptcy Court issues an order telling all of your creditors to leave you alone (the “automatic stay”). No more phone calls, no more collection letters,  no more lawsuits, no repossessions or  foreclosures.  After you file bankruptcy, the creditor is not even allowed to talk to you. In addition, the creditor must stop any collection attempts already started – at least once the creditor knows about your bankruptcy.  If a creditor violates the automatic stay, you have the right to bring the creditor before the Court for Contempt of Court, and to be compensated accordingly.

You can't get rid of back taxes through bankruptcy.

Income taxes more than 3 years old are dischargeable in bankruptcy.  Under the law there are 3 or 4 qualifications that have to be met.. but once these are met, these taxes are gone. Filing bankruptcy does NOT get rid of withholding or sales taxes...no matter how old they are.

You can pick and choose which debts and property to list in your bankruptcy.

Under the law, when you file bankruptcy you have to list ALL of your property and ALL of your debts.    You MUST tells the court about everything you own, everything you owe, everyone who you owe money to and everyone who owes you money.  Most people want to leave out a debt because it is their intent to keep paying on it.  Even though the law requires that you list the debt, as long as you continue to pay for your secured property, you can keep it. Also, if your conscience won't let you sleep nights because you didn't pay your debts, there's nothing in the bankruptcy code that prevents you from doing that once you're back on your feet.

All debts are wiped out in Chapter 7 bankruptcy.

Certain types of debts cannot be erased in bankruptcy. They include child support, student loans, certain taxes and debts incurred as the result of fraud.   In addition, if you want to keep property where a creditor has a secured debt (your house, car, probably furniture and computers) you must continue to pay for it.

If you're married, both you and your spouse have to file for bankruptcy.

Not true. In many cases, where both husband and wife have a lot of debt., it makes sense and saves money for them to both file, but it is never a requirement under the law.

It's really hard to file for bankruptcy.

No, it's not. at least not in the hands of an experienced bankruptcy attorney. The decision to file may be hard, but once the decision is made...the filing part is easy.