New Bankruptcy Law Myths

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Akron Ohio Bankruptcy Misinformation Lawyer

Dispelling New Bankruptcy Law Myths

While the 2005 changes to the U.S. Bankruptcy Code are still being interpreted and applied today, there is no shortage of myths, half-truths and outright lies being circulated about the right to successfully continue filing for bankruptcy.

As one of the leading consumer bankruptcy law firms in northeastern Ohio, Debra Booher & Associates provides exceptional experience helping clients protect their right to pursue a fresh start through bankruptcy.

Our skilled attorneys have handled over 15,000 bankruptcies. Contact us to learn the truth behind some of the new bankruptcy law myths below.

  • Many Americans No Longer Qualify — NOT TRUE. Nearly 100 percent of those eligible to file under the old laws are still eligible under the new laws. There are many new requirements such as a means test; however, many changes are merely cumbersome but do not prevent you from obtaining meaningful relief. Help from a highly qualified bankruptcy lawyer is even more critical to finding a bankruptcy solution to meet your needs.

  • You Will Lose Everything — THE TRUTH IS people who file bankruptcy can usually still keep homes, cars and other personal property. Many exemptions still exist that allow you to keep possessions, up to revised allowable limits. We can help you determine which property and assets qualify and how much to help you find sound methods for maintaining a respectable quality of life.

  • You Must Pay Back All Debt in Full — This new bankruptcy law myth is SIMPLY FALSE. Many forms of debt such as credit card debt and some outstanding loans can still be discharged in bankruptcy. It is also a myth that everyone has to repay debt — the reality is that a small percentage of people require a Chapter 13 repayment plan due to income. In addition, secured loans can often still be renegotiated for lower amounts and better payment terms.

  • You Cannot Own Anything After Filing — THE TRUTH IS that most, if not all, of the property most people own is protected or "exempt" from creditors. Also, the majority of property acquired after filing cannot be taken to pay your debts. Only a few types of property acquired after filing Chapter 7 can be pursued by the trustee. For example, domestic property settlements, life insurance benefits or an inheritance to which you become entitled within 180 days of filing may be used to pay creditors if they are not exempt. You are entitled to keep exempt property and obtain other assets after your bankruptcy is filed. Our lawyers know the laws and how to protect this and other rights.

  • All Related and Future Credit Will Suffer — ALSO NOT TRUE. A bankruptcy deals with the past credit of the person filing only. If you're unable to pay your debts down, you probably have no ability to borrow anyway even if you have maintained a high score by making timely payment (often by robbing Peter to pay Paul). Married couples often file jointly to address household debt, but it is not required (i.e., if only one spouse is liable on most of the debt, the other spouse may not need to file). Bankruptcy continues to provide debt relief when people are unable to handle their debt load, and it allows individuals to begin rebuilding their financial health. After bankruptcy, you are not eligible to file again for a number of years AND you have little or no unsecured debt remaining. Thus, with your "debt to income" ratio back in balance, the majority of people find they are much more creditworthy after bankruptcy than before when the debt payments consumed their income.

While many people also worry that everyone will automatically know he or she filed for bankruptcy, the reality is, unless you tell your family or others, only creditors to whom you owe money may know. Non-creditors must research your name through courthouse records to find such public information or search some legal periodicals that publish the information. Few regular newspapers find it worthwhile to publish bankruptcy filings.

Act Now to Protect Your Bankruptcy Rights

Don't let these and other new bankruptcy law myths you may have heard stop you from filing. While Chapter 7 can still be done in a timely fashion, Chapter 13 is not a quick process. Don't wait until the last minute. If you have questions, contact Debra Booher & Associates to FIND OUT THE TRUTH before you decide whether bankruptcy is a valid option for you.