Bankruptcy Myths & Fears
In 2005, Congress made several changes to the United States Bankruptcy Code. Unfortunately, there is a misconception about those changes and the new laws. Here is a brief summary of the most common myths – and the truth about bankruptcy law.
If you have additional questions about bankruptcy and your rights, contact the Law Offices of Nella E. Mariani, P.C. today to schedule your free consultation with an experienced Illinois bankruptcy attorney.
I’m not eligible for bankruptcy: Typically, not true. Most people who explore bankruptcy options find that they are eligible for Chapter 7 or Chapter 13 bankruptcy. Even if you have a previous Chapter 7 bankruptcy, you may still file for Chapter 13 bankruptcy.
Only irresponsible people file for bankruptcy: Absolutely not true. As a matter a fact, it is the opposite. Filing for bankruptcy is a responsible act for it allows you to take control of your debt rather than waiting for the winning lotto ticket. Most people who file for bankruptcy have experienced a life changing experience such as loss of employment or serious illness that has caused their debt to become unmanageable.
Everyone will find out that I filed bankruptcy: False, unless you tell them. Generally, only your creditors will be advised of your bankruptcy.
I will lose all of my property: False. Most of your property is granted protection under bankruptcy law. Bankruptcy law allows people to keep all or most of their property. What assets you can keep will depend on whether you file a Chapter 7 or Chapter 13 bankruptcy. You are allowed to keep all of your assets in a Chapter 13. With a Chapter 7 bankruptcy, many property items, including homes and cars, may be kept through bankruptcy exemptions and reaffirmation agreements as long you keep making your ear and mortgage payments. In most cases, clients retain the property they wish to keep.
My credit will be ruined for life: False. A bankruptcy is unlikely to make your credit score worse especially if you are already delinquent on a number of debts. In fact, there is some evidence that a bankruptcy will make it easier to obtain future credit because creditors see that the old obligations have been reduced or discharged. Lenders are more likely to extend credit after the bankruptcy because of the reduction of debt.
From the moment you obtain your bankruptcy discharge, you improve your credit score. Once you get control of your debts, you can immediately start to rebuild your credit. Many clients are surprised at just how fast they are able to purchase homes and cars after their bankruptcy. I could lose my job: False. Employers are prohibited by law from firing an employee because he or she files bankruptcy.
Bankruptcy Experience That Works for YOU
Attorney Nella E. Mariani has more than a decade of experience in bankruptcy, debt relief and bankruptcy litigation. Her practice focuses exclusively in bankruptcy and debt relief matters. She works closely with each client and provides them with a high degree of knowledge, professionalism, and sensitivity.
If you need to speak to an experienced Illinois bankruptcy attorney, contact the Law Offices of Nella E. Mariani, P.C. to schedule your FREE CONSULTATION
Committed to making a positive difference in your financial future