Myth 1: The new bankruptcy law means you cannot file chapter 7 anymore or cannot get rid of credit card debts.
Not True: I am sure many of you have heard the news stories that bankruptcy relief is severely limited under the new law. Actually my experience has been that almost everyone that could file a bankruptcy under the old law can still file under the new law. In fact, in some cases the new law is better for some people! I have helped people file under the new law and probably can help you too.
Myth 2: If I file bankruptcy I will lose my house/car/personal belongings.
Not True: In most cases you will not lose anything in the bankruptcy. You will be entitled to “exempt” or protect most if not all of your property and belongings under state or federal exemption laws. For example in Oregon you can protect up to $30,000 of equity in your home ($39,600 if married and filing a joint case), $2,150 of equity in your car, $1,800 of clothing and jewelry, $3,000 in household goods and furniture. There are many other exemptions that apply to other types of property. I will perform a complete analysis of your property and exemptions so you will know if anything you own is at risk. In cases where you do have non-exempt assets you may be able to use a chapter 13 to save your property. If you have loans against your property such as a home or car, you must continue paying these loans in order to keep the property.
Myth 3: After filing bankruptcy I will not be able to get credit for 10 years:
Not True: A bankruptcy will be reported on your credit report for 10 years, but you will be able to obtain credit much sooner. In fact many people can buy a car or a home shortly after the discharge of their case. And many people will have substantially improved credit scores in 2 to 4 years. You also will probably receive unsolicited credit card offers and offers to finance cars shortly after your case is filed and again after your discharge.
Myth 4: If I file for bankruptcy everyone will know.
While it is true that a bankruptcy is a public record, there are so many bankruptcies filed that probably no one you know will ever spend the time to review new filings. Most general circulation newspapers do not publish bankruptcy information but a few business-oriented newspapers do. Fortunately most people do not read these papers and the bankruptcy information is buried in the back in small print. Also, the court now requires that only the last 4 digits of your social security number be available for the public record. Only the court, trustee and the creditors that are sent notice of your case will have the full number.
Myth 5: It’s really hard to file for bankruptcy especially under the new law.
It can be confusing and difficult to file bankruptcy on your own, but in the hands of an experienced lawyer, filing a bankruptcy in the District of Oregon can be smooth and hassle free. I will ask for a variety of documents to help me prepare your case. I will take care of all the paperwork and calculations needed to make your case a success.
Myth 6: Only bad people or deadbeats file for bankruptcy.
NOT TRUE: Almost everyone I have ever met as a client has been a decent, hard working person that got into financial trouble due to a job loss, health problems or they simply made some bad decisions that they could not recover from.
Myth 7: Filing bankruptcy will hurt your credit rating:
Sometimes this is true but usually it is NOT TRUE. A bankruptcy can often help you to rebuild your credit because your bad debts will be discharged and you will be a better credit risk to many lenders. Think of a bankruptcy as a dividing line between old bad credit that is already on your credit report and new good credit that will eventually be on your credit report. If you do nothing the bad credit just keeps getting reported on your credit report again and again. A bankruptcy stops this cycle and allows you to put new good credit on your credit report.
Myth 8: You cannot get rid of taxes if you file bankruptcy.
NOTE TRUE: I have helped people get rid of hundreds of thousands of dollars of tax debts. Generally, if the tax is an income tax that was filed on time and was due more than three years ago, you can eliminate the tax debt entirely. Even if the tax cannot be eliminated, you may be able to use a chapter 13 to pay back the tax over a five-year period. Determining whether or not taxes can be eliminated (discharged) can be tricky, especially if you have had a prior bankruptcy or an offer in compromise. It is best to talk with a lawyer so you will know if a bankruptcy can help you.
Myth 9: You can only file bankruptcy every 7 years.
Unfortunately the new law changed the time between filing chapter 7 cases to 8 years. However, there is HOPE: You may be able to file a chapter 13 four years after a chapter 7.
Myth 10: You can pick and choose which debts to list on your bankruptcy and leaving a debt off your bankruptcy means it is not included.
BOTH NOT TRUE: You must list all debts, even those you want to keep paying or debts owed family members. Intentionally leaving out a creditor is against the law. There are ways to keep debts after bankruptcy if you want to and y experience has been that most family members and friends you owe money to are very understanding about your financial difficulties. And, you are free to pay back any creditor you want to after your case is done. Do not pay family members or friend before you file, but paying them afterward is perfectly acceptable.
Myth 11: I will have to go to court and be grilled by my creditors.
NOT TRUE: Most people that file for bankruptcy in Portland Oregon never go to court. They do have to appear at a meeting of creditors, however, in most cases no creditors show up. The main purpose of the meeting it to answer questions from the bankruptcy trustee about your property or any recent financial transactions you may have been involved in like selling a home or car. He will also want to know if you have made any unusual payment to your creditors or if you have paid any friends or family members. This meeting usually lasts less than 10 minutes. I will make sure you are fully prepared for this meeting. I have been a Portland Oregon Bankruptcy Lawyer for over 12 years and have been in front of all the trustees many times and I know the types of questions each one is likely to ask you.