PERHAPS you’ve considered filing bankruptcy but in the back of your mind, you have one or two questions that you’ve always been afraid to ask. In counseling thousands of people over the years in my practice as a bankruptcy attorney, I have found that most people have the same fears and concerns about bankruptcy.
From experience, I have found that the following misconceptions often stop them from making a decision to go forward in spite of the fact that they know and realize that bankruptcy is their only way out of debt. In this article, I will try to address most of them.
“My immigration status may be affected and I will never become a U.S. Citizen.” FALSE: The truth is that filing bankruptcy is NOT a crime, and it will not affect your immigration status or your application to become a U.S. Citizen.
“I heard that if I file bankruptcy, I will have to pay back everything anyway so what’s the point of doing it?” FALSE: If you qualify for Chapter 7 bankruptcy, debts are completely wiped out except certain taxes, student loans and child support. In Chapter 13, in most cases, you only pay a small percentage of what you owe and all your bills are consolidated into one affordable monthly payment.
“Bankruptcy means that I’ve failed.” FALSE: Bankruptcy is nothing more than a legal remedy to cope with debts you can no longer pay. Most bankruptcies are also caused by factors beyond your control so it doesn’t make sense to blame yourself.
“I’m better off hiring a debt settlement company so I can avoid bankruptcy.” FALSE: From experience, I have seen very few people succeed in getting out of debt through a debt settlement company. That is due to the fact that most of these companies will sell you the idea of paying your creditors slowly over a 3 to 5 year period while all your debts go to collections. However, creditors will not simply sit and wait for their money for that long. They will often sue you within the first 12 months of not getting paid. If you do get sued, these companies cannot protect you and chances are, you will end up filing bankruptcy anyway. So you just end up paying the debt settlement company a lot of money for nothing. Beware. It’s often a complete waste of time and money.
“My credit will be forever ruined and I will never be able to buy a car or house again.” FALSE: You can buy a car after your bankruptcy discharge although you will often pay a high interest rate until you get your credit re-established. After Chapter 7 bankruptcy, most people can get credit again after approximately 3 years. It is a matter of understanding how the credit system works and taking the steps needed to rebuild credit after bankruptcy. One way to start is by applying for secured credit cards after bankruptcy and paying your bills on time again.
“I might lose my home and everything I own if I file.” FALSE: More than 90% of Chapter 7 cases are “no asset” cases. Bankruptcy laws also allow you to exempt most of your assets. Personally, 99.9% of my clients lose nothing. If losing an asset is a concern in any case, filing a Chapter 13 is always an option in most cases.
“I need to be behind on all my bills to file bankruptcy.” FALSE: If it is clear to you that you are headed towards debt trouble, do not wait until your situation becomes a financial emergency. The best time to consult with an attorney is now, not later.
From what I’ve seen, people suffer needlessly (when they should be filing bankruptcy to get out of debt) simply because they have not taken the time to find out if their fears or concerns about filing bankruptcy are even real or legitimate. To schedule a free consultation, please call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.