In my experience, if you have not re-established good credit in 2 to 4 years after you file bankruptcy, it most likely has nothing to do with the fact that you filed bankruptcy. And it certainly has absolutely nothing to do with the fact that your credit history still shows an old bankruptcy filing.

Although the bankruptcy will stay on your credit, the truth is you can start rebuilding your credit once your bankruptcy is discharged. Making current, full payments on debt is one way to start building your credit while you are still in the bankruptcy.

Myth 2: Everyone will know you filed for bankruptcy.

Not True. Bankruptcy is public record but unless you are a prominent official or a celebrity in society, people aren’t going to go looking. The only people who are going to know are your creditors, those who you tell and those who have access to the bankruptcy court record system. Some people think that newspapers carry bankruptcy filing information, but in our area, this is simply not true.

Myth 3: Under the new bankruptcy law, there’s no more bankruptcy and there is no more help with the new bankruptcy law.

Not True. The bankruptcy reform act changed only the method in which Debtors qualify for the different types of bankruptcy. It doesn’t prevent people from filing. The truth is in most situations people are still able to get the same relief now as before the law changed.

Myth 4: You are a bad person for filing bankruptcy.

Not True. There is a reason that over one million people file for bankruptcy each year and it is not because they are bad people. Most of the people who file bankruptcy are good, honest, hard-working people, just like you and me, who file as a last resort after months or years of struggling to pay the bills. The bills may be from some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or growing old, or some family emergency, or because you honestly and mistakenly fell into debt at a young age before you knew better, before you knew anything about budgeting or how to manage money.

The truth is Bankruptcy is a solution to help good people go through a bad time. It provides hard working people with the fresh start that they deserve, but are not able to obtain. If you need to file, bankruptcy is actually one of the most positive, responsible, honorable and noble steps you can take on behalf of your family and your family’s future, happiness and prosperity.

Myth 5: You can pick and choose what to put into bankruptcy.

Not True. You do have to list all of the debts that you owe and the property that you own. You cannot discriminate between creditors, even if you want to keep paying them. It is good to want to continue paying creditors, but it is still mandatory to include the debt. If you feel like paying it after the bankruptcy then go ahead, but you will not be obligated to. In fact, after bankruptcy, there are some debts you have to keep paying. For example, if you have a vehicle or house loan, it must be listed in your bankruptcy, but if you want to keep the vehicle or the house you must pay the loan.

Myth 6: It’s hard to file for bankruptcy.

Not True with the help of an experienced bankruptcy lawyer. There is a lot of paperwork involved, but having a skilled attorney makes the process much smoother, assists you in filing the proper papers and and helps you keep as much of your property as possible.

With our help the bankruptcy filing is easy. The decision to file may be hard, but once the decision is made, filing is easy.

Myth 7: You will never be able to own property again.

Not True. In the future, you may buy, own, control and possess whatever you want and can afford. There are no laws preventing you from buying homes, vehicles or household furnishings. Many of our clients have received car loans, credit card offers and have been extended credit right after the discharge of their bankruptcy. The truth is you will be able to purchase whatever you can afford.

Myth 8: You will lose everything you own.

Not True. Most of our clients do not lose anything. Bankruptcy allows you to keep your property. Laws that allow you to keep property vary from state to state. While laws vary from state to state, every state has exemptions that protect certain kinds of property. Using Florida as an example, there are exemptions to protect such things as your house, your vehicle, household goods and furnishings, IRAs, retirement plans, and the cash value in life insurance. In some cases, there is even a “wildcard” exemption of $4,000 per person that can be applied wherever you want it. In those rarer situations where you have more property than can be protected by available exemptions, there is Chapter 13. In Chapter 13, you can even keep this property by paying a higher Chapter 13 plan payment.

At the same time, filing bankruptcy does not generally wipe out or get rid of mortgages or liens against your property. Therefore, if you want to keep a car, truck, home or business equipment that serves as collateral for a loan, you need to keep paying on the debt. If you make these payments (and there is no equity or if you have exemptions to cover any value above what is owed), you can rest assured you will be able to keep these items.

Myth 9: Both you and your spouse have to file bankruptcy together.

Not True. You can file together or separately, that is your choice. In many cases it makes sense for husband and wife to file together (both have significant debt), but in some instances the spouse might not want to file. This is absolutely fine and definitely allowed by the court. Moreover, if you and your spouse have no joint debt, your filing will have no impact on your spouse’s credit.

Myth 10: You can’t get rid of back taxes in bankruptcy.

Depends. You can get rid of income taxes that are more than three years old by filing bankruptcy. There are several qualifications that have to be met in order for the taxes to be wiped out, but having a portion wiped out is better than none at all. In addition, sales taxes must be repaid and cannot be wiped out by filing bankruptcy.

Myth 11: You can only file bankruptcy once.

Not True. You can file for bankruptcy as many times as you like. Although, you are limited by how often you can receive a discharge. You can receive a discharge from Chapter 7 once every 8 years. You can receive a discharge from Chapter 13 every 2 years. If you get discharged in a Chapter 7 you have to wait 6 years before getting a discharge from Chapter 13. If you get a Chapter 13 discharge then you need to wait 4 years to get discharged from a Chapter 7. However, there is no waiting period if your prior bankruptcy case was “dismissed” as opposed to “discharged”. You can file back to back should you choose.

Myth 12: You can never get credit again.

Not True. As crazy as it may sound, you are more likely to get credit after you file, then if you do not file. Filing bankruptcy gets rid of debt. Getting rid of debt puts you in a position to handle more credit. This makes you look more attractive to banks, credit card companies and other lenders. Many of our clients have received credit card offers and financed vehicles almost immediately after the bankruptcy. However, it is always important to be careful and only borrow what you can afford.

At first, the banks, credit card companies and other lenders will want more money down and will want to charge you higher interest rates. However, if you are careful, keep your job, start saving money, pay your bills, and do things that put good marks on your credit report, the quality of your credit will get better and better over time.

Myth 13: Only losers file for bankruptcy.

Not True. Bankruptcy is a means for good people who are going through bad times to get relief. Many times people have to file because they have lost their job, gone through divorce, or experienced medical illness. Bad times don’t make a person bad. Bankruptcy can provide the relief that good hardworking people need to get them out of the bad time.

Myth 14: Creditors can still harass you if you file for bankruptcy.

Not True. When the bankruptcy is filed, the Bankruptcy Court issues an order, called the “automatic stay”, telling all of your creditors to cease all communications and collection actions. Creditors are not allowed to contact you for any reason, which includes calling or even billing you. If they persist in harassing you or continue their collection efforts, you have the right to bring the creditor before the Bankruptcy Court and be compensated for the damages. The automatic stay is very powerful. Once you file for bankruptcy, creditors must leave you alone or suffer the consequences. No more phone calls. No more collection letters. No more lawsuits.

Myth 15: Filing bankruptcy causes more family trouble and divorce.

Not True. Bankruptcy eliminates debt eliminating financial stress. Filing bankruptcy is the solution to the problem, not an additional problem. The problem is the inability to pay your bills and to provide for your family. This inability causes significant stress and unless action is taken, may lead to marital, medical or employment problems. Bankruptcy is designed to eliminate or reduce your debt, protect your property and reduce the stress. Although making the decision to file bankruptcy might be difficult one, the relief provided will lift a huge weight off of you and let you sleep at night. The absence of financial stress will give your relationship a fighting chance.