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Common Bankruptcy Myths

(425) 953-4326

Everett, WA Bankruptcy Lawyers

Assisting clients throughout Snohomish County

Everett Bankruptcy Attorneys

(425) 953-4326

Low Flat Fees

Flexible Payment Plans

Everett Bankruptcy Lawyers

Bankruptcy Myths

Myth #1: I can’t file bankruptcy anymore under the new bankruptcy laws.

FACT: The new bankruptcy laws that went into effect in October 2005 do not generally affect 90% of our clients!  The others can still file, but must go through a couple of hoops that we can easily guide them through.  We explain the details of the new law below – take a look!

Myth #2: I can’t discharge medical bills/ torts/ credit cards in bankruptcy.

Debts that are discharged in bankruptcy today are unsecured debts like credit cards and medical bills.

Myth #3: I will lose everything I own if I file bankruptcy.

FACT: Not true.  The law actually provides exemptions to protect your personal belongings, like cash in the bank, your house, car, furniture, jewelry, tools, and other things. We explain exemptions below.

Myth #4: Bankruptcy is dishonest and wrong.

FACT:  Bankruptcy is legal, and is one of your constitutional rights.  The purpose of the law is to protect you while you get your life back on track.

A chapter 13 bankruptcy allows people to be protected by the Court while they make their best efforts to pay some money back to their creditors.  You can also voluntarily pay anyone back that you want to after the case is over – you just won’t have the legal requirement to do that. [put in references to Jubilee,etc. in here.]

Myth #5: I can’t ever buy a house or a car if I file bankruptcy.

FACT: Actually, many of our clients are able to get car loans right after filing bankruptcy, and clients can get FHA loans to buy homes two years after filing a chapter 7 bankruptcy.

Some of our clients have been able to get home loans even while in a chapter 13 bankruptcy!

Myth #6: A bankruptcy will affect my credit record forever, and I will never be able to get loans again.

FACT: Bankruptcy can appear on your credit report for up to 10 years.  Another fact: negative credit can appear on your credit report for 7 years, anyway. Many of our clients actually get a boost in their credit score after filing a bankruptcy.  This is because the debts are no longer collectible.

At first this doesn’t make sense.  But if you were a lender and had to choose between two people to loan money to, who would you pick?  The person with $30,000 of unpaid credit card debt which is going into collections?  Or the person who filed a bankruptcy and discharged the $30,000 and has no collectible debt left at all?

The safer bet is someone who doesn’t have other creditors competing for payments, which is why many of our clients are able to rebuild their credit quickly.