Myths About Bankruptcy
The Law offices of Generoso Squitieri · Bergen County, New Jersey
As experienced bankruptcy attorneys, we are accustomed to our clients' objections when we suggest that Chapter 7 or Chapter 13 bankruptcy might be the best possible solution to their financial troubles. Most of these objections are based on myths about bankruptcy.
We know that people worry that filing bankruptcy will ruin their credit or force them to give up their home. We also know that some of our clients believe they earn too much money to qualify for bankruptcy. These are some common bankruptcy myths, and they are myths.
As a service to our potential clients, the bankruptcy lawyers at the Law offices of Generoso Squitieri present a few bankruptcy myths.
Bankruptcy Myth #1: Bankruptcy Ruins Your Credit
It is true that your credit report will include bankruptcy information for ten years after you file for bankruptcy. However, this does not mean that you will not have access to consumer credit cards and even home mortgage loans. From the point of view of lenders, carrying bad debt (making late payments on loans) looks nearly as negative as a bankruptcy. In fact, banks looks favorably upon those who are in Chapter 13 bankruptcy and are making their regular payments.
Bankruptcy Myth #2: I Cannot Sell My House If I File for Bankruptcy
You are not stuck with your house and house payments if you file for bankruptcy. You can still sell your house if you file for Chapter 13 bankruptcy. You will have to get permission from the court, and you may be required to use the proceeds to pay off some or all of your debt.
Bankruptcy Myth #3: I Cannot Keep My House If I File Bankruptcy
This is one of the biggest myths of all. Chapter 13 bankruptcy is designed in a way that allows you to keep your house while still receiving debt relief. Chapter 13 is often called "debt restructuring bankruptcy" because the court will look at your income and debts and work out a payment plan for you to pay your debts at reasonable rates based on your income.
If you are under a huge debt load and are unable to negotiate a loan workout with your mortgage company, Chapter 13 bankruptcy may be a good solution. It gives you back control of your monthly payments.
Bankruptcy Myth #4: Bankruptcy Is Just for Poor People
Qualifying for bankruptcy has very little to do with how much money you earn. Instead, bankruptcy is all about the ratio of your income to your debt. Before you can declare bankruptcy, you have to prove to the court that you do not have the financial resources to pay off your debt. This is different from proving to the court that you are not wealthy. For example, if you make $200,000 each year but have $205,000 of annual financial obligations — you may be a candidate for bankruptcy.
Get Personal Help with Bankruptcy Questions from High-Quality Attorneys
Personalized attention is a unique feature of our New Jersey law offices. At the Law offices of Generoso Squitieri, we believe in offering responsive, knowledgeable and straightforward service. Therefore, all correspondence with our office will be with one of our attorneys, not support staff. For experienced representation, contact our Fort Lee law offices today.
Call (201) 282-5515 or toll-free at (866) 430-5528
Send an e-mail
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.