1. Most people do not lose their personal possessions through bankruptcy
- Although it is true that you may be required to give up your property, there are provisions within the Oregon Revised Statutes which were placed there to allow you to keep much of your property.
2. That you are not a failure for filing bankruptcy and that the world will not look down on you.
- Did you know that Walt Disney and Laugh-O-Gram Films were forced into bankruptcy in 1923? At that point, Walt thought his career was over and he moved to California, where Mickey Mouse was created. The rest is history as they say. Walt and many others, including Presidents Abraham Lincoln and Harry Truman, had to look to the bankruptcy courts to get their financial life back on track.
3. You will qualify for credit again post-bankruptcy.
- You will begin to receive credit offers before you are even discharged. Although with a bankruptcy on your record, you can get credit. The side effect of bankruptcy is that you might be offered a higher interest rate or down payment until you re-establish your credit. How do you do that? Being smart is the first step. You do not run out and charge up lines of credit again. You pay your existing car or house payment on time each and every month. Not within the grace period or within the 30-day period, but on time each and every month and your credit will begin to rebuild.
4. You don’t have to have large amounts of debt or income to file.
- There is no income requirement in Chapter 7 Bankruptcy. In addition, everyone is unique. For one person, $5000 of debt is manageable. For another, $5,000 strangles them each and every month and stops them from buying needed prescription or from putting food on the table.
5. You may qualify for bankruptcy even if you filed a Chapter 7 in the last 8 years.
- It depends. It depends on how long ago you filed and what kind of bankruptcy case you filed. Was the case a chapter 7? Did you get a discharge or was your case dismissed? You can file a chapter 13 and get a discharge 4 years after a chapter 7 discharge. Do you qualify for a Chapter 7 today or would a Chapter 13 be better for you? The only way to know for sure is to speak with a professional.
6. Your spouse will not hate you for ruining their good credit.
- If your spouse has good credit, then you each probably have separate lines without the other. If this is true and your spouse is not liable for your debt, then you can file bankruptcy and not include your spouse. This way you can discharge your debt and your spouse can KEEP their good credit.
7. The new bankruptcy law has NOT ended Chapter 7 bankruptcy.
- Your creditors would love for you to believe this, however, it is just is not true. It is true that it may be more difficult for you to qualify for a Chapter 7 (and definitely more paperwork), but the new legislation has not eliminated Chapter 7 bankruptcy. The only way to know whether or not you qualify is to speak to a qualified attorney or individual trained in the new law.
8. Filing bankruptcy does not make you a bad person (or bad Christian).
- My clients are good, decent people who have fallen on hard times. I would never try to tell you what God thinks but I can tell you to look up Deuteronomy 15:1-2 and read that verse (there are many many others).
9. You will not lose your retirement benefits in bankruptcy.
- If your retirement plan qualifies as an IRA or 401(k) or a pension plan, your retirement is protected from creditors.
10. Everyone will NOT know that you filed for bankruptcy.
- The fact is that a bankruptcy filing is public record. The question you must ask is when was the last time you saw a list of bankruptcies printed in our local paper? Your neighbors, employer, or family members may never find out that you filed bankruptcy until you tell them. Many of my clients say that when they spoke to friends about their bankruptcy, the friends were surprised as they hadn’t heard anything about it