Bankruptcy Myths

1. Everyone will know that I filed for bankruptcy. Unless you are a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors.

2. I will lose all my assets.
This is the misconception that keeps many people who really should file for bankruptcy from doing it. If you have lived in Florida for two years or more, there are exemptions that protect certain kinds of assets, such as your house, your car, money in qualified retirement plans, household goods and clothing. If you have a mortgage or a car loan, you can keep your house and your car as long as you keep making the payments.

3. I will not be able to obtain credit again.
It will not be long before you will be getting credit card offers again. They will just be from lenders that will charge high interest rates.

4. All of my debts will be discharged in a Chapter 7 bankruptcy.
Certain types of debts cannot be discharged (erased). They include child support, most taxes, student loans, and debts incurred as the result of fraud.

5. If I am married, both of us have to file for bankruptcy.
Depending on your circumstances, it may be advisable for you to file for bankruptcy relief without your spouse. For example, it is not uncommon for one spouse to have a significant amount of debt in their name only. The cost is the same whether one spouse or both file.

6. I have to pay back all my credit cards in Chapter 13.
You only have to pay back what you can afford to pay, with a few exceptions. Your payment in Chapter 13 will have to cover your secured debt (i.e., car loans, mortgages), the trustee’s fee, and attorney’s fee (if any is included in the plan). If you can afford to pay more than that amount, then your credit cards and unsecured debt will get paid something.

7. I will never be able to own anything again.
In the future, you can buy, own and possess whatever you can afford.

Shmucher Law, PL, a bankruptcy law firm, represents debtors, creditors, and trustees in bankruptcy matters throughout Broward and Miami-Dade counties.

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