Bankruptcy Misconceptions
Before you decide whether bankruptcy is or is not the right option for you, it's important to cut through the many misconceptions people commonly have that prevent them from considering bankruptcy. You need an experienced Cincinnati, Ohio, bankruptcy attorney who can properly inform you about your options.
Misconceptions and Facts About Bankruptcy
- I will lose everything, including my house and car. In most cases this is not true. Many personal assets, such as a car, are protected during a bankruptcy, depending upon the value of the asset. You will be able to keep your home if you can keep up with your house payments and get current on back payments. Bankruptcy can help you do this.
- I need to spend down all my assets, including my retirement fund, before I can file for bankruptcy. This is one of the most serious mistakes people commonly make before they finally file for bankruptcy. They use their IRA or 401(k) to try to pay off debt. In the end, they are still in debt but now they have nothing left for their future. This is a tragic mistake because your pension, 401(k) and IRA are protected in bankruptcy. Your creditors cannot access them or force you to part with them. Worse yet, if you use your retirement funds prematurely, you will have to pay large withdrawal fees and significant taxes on them. Learn more about asset protection by talking with a bankruptcy lawyer.
- Bankruptcy will ruin my credit for all time. If you are considering bankruptcy, chances are your credit is already in very bad shape. You have missed payments. You have fines and fees. You have far more debt than you can repay. The truth about bankruptcy is that it may improve your credit score as you get rid of old debt and begin to make payments on remaining debt. It's likely that your credit score will rebound about a year after your bankruptcy filing.
- I can't file for bankruptcy because I've had a previous bankruptcy. You can file for Chapter 7 bankruptcy every eight (8) years, and you may be able to file for a Chapter 13 if you are ineligible for a Chapter 7 at this time. You don't have to wait a certain number of years for a Chapter 13 but must have finished discharge of a prior Chapter 13.
- I should try debt consolidation before I do bankruptcy. Debt consolidation has some real downsides, of which many people are not aware. It's important that you understand the negative consequences of debt consolidation - as well as the benefits of bankruptcy in your specific case - before you make any decision about contacting a debt consolidation agency.
The Truth About Debt Consolidation
There are two things to be particularly concerned about when considering debt consolidation. The first is fraud and the second is the lack of protection it offers you from your creditors. Debt consolidation does not offer you any protection from legal action by your creditors. Because participation is voluntary, your creditors may simply refuse to accept the plan. You could find yourself facing a creditor lawsuit although you have paid thousands to the debt consolidation company.
When you file for bankruptcy, your creditors are prevented from taking legal action against you. Foreclosures and repossessions are temporarily, or permanently halted.
At the law office of Patrick J. Conway LLC, in Cincinnati, I help individuals and small businesses get the debt relief they need, with personal bankruptcy or business bankruptcy with Chapter 7 and Chapter 13. To get the facts about bankruptcy and how it will help your debt situation, contact me, a Cincinnati bankruptcy lawyer, or call my Cincinnati office at 513-924-4517 to schedule a free initial consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
