Helping Clients Understand The Truth About Bankruptcy
Will Filing Bankruptcy Ruin My Credit?
Most people mistakenly believe that their credit and their credit report are the same. This is wrong. Your credit is your ability to borrow money, while your credit report is a summary of your payment and credit history.
Although you may have perfect payment history, if you currently have more bills than you can afford, you have no credit because no one will loan you any more money. Many people discover this when they apply for a consolidation loan.
After the bankruptcy, you will have little, if any, debt and you will be a better credit risk to creditors because you will be able to afford the payments on new debt.
I’ll Never Be Able To Buy A Home If I File Bankruptcy
Wrong. Will you be able to buy one now? Probably not.
Despite this fact, bankruptcy gives you the ability to save for a down payment on another home. In addition, you will have qualifying income when seeking a mortgage, which is something you probably couldn’t do when your debts were eating up all of your disposable income.
Most people are able to qualify for a mortgage within two years following a bankruptcy. Because of her reputation, attorney Debra Booher can even put you in contact with lenders willing to work with people who have gone through bankruptcy.
To qualify for a mortgage, your debt cannot exceed a certain percentage of income per month. If your debt is too high, you will NEVER qualify, EVEN IF YOU HAVE PERFECT PAYMENT HISTORY! That is why “robbing Peter to pay Paul” will never solve your problems. Many people continue to borrow on one card to make payments on another thinking that on-time payments are all that matters. That is totally wrong! You can consult any mortgage lender to verify this!
I Can Have My Bankruptcy Filed By A Petition Preparer
Petition preparers charge you a fee to prepare and file your bankruptcy. However, petition preparers cannot legally give you advice because they are not attorneys. They simply file whatever bankruptcy papers you ask them to file, whether you should do that or not.
Our law firm, Debra Booher & Associates, recently represented a client who had a petition preparer file a Chapter 7 bankruptcy for her even though she had $40,000 worth of non-exempt equity in her house. Her assets exceeded her debts and she would have lost her house to her creditors. We are converting the woman’s bankruptcy to a Chapter 13 to help her keep her house.
Anyone can file bankruptcy forms, but without an experienced attorney advising you, you could end up losing thousands of dollars of assets to creditors.
My Bankruptcy Is Simple — Any Bankruptcy Attorney Can File It
There are simple bankruptcies; but even a “simple” bankruptcy can be complex without adequate preparation and advice.
You might think you have a slam-dunk case, only to find out that the property you transferred to a relative has been disqualified because it was transferred too recently, the payment you made to a creditor could be considered a “preferential payment” by the bankruptcy trustee, the retirement plan assets you expected to keep are not from a qualified plan or that your recent credit card purchases could be considered fraud.
If you file bankruptcy without thoroughly reviewing your assets with an experienced bankruptcy attorney who follows bankruptcy case law closely, you could lose thousands of dollars of assets to the bankruptcy trustee. You could even end up filing the wrong form of bankruptcy protection if your bankruptcy lawyer does not properly analyze exemptions. Bankruptcy case law is mind-bogglingly complex and there are many gray areas with exemptions.
I Don’t Need To File Bankruptcy Because I’m Unemployed And My Debts Are Uncollectible
For some people this statement is true. If you have no assets and no income, your debts are uncollectible. However, you may want to file bankruptcy anyway to improve your credit. And while you may be unemployed now, when you go back to work your creditors could garnish your wages. You should still seek an attorney’s advice concerning if — and when — you should file bankruptcy.
Contact A Bankruptcy Attorney In Northeastern Ohio Now
Debra Booher & Associates is one of the leading consumer bankruptcy law firms in northeastern Ohio. Lawyers at our firm file more than 2,000 bankruptcy cases per year for clients throughout northeastern Ohio, including Akron, Canton, Cleveland and Kent/Ravenna.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.