Common Bankruptcy Myths
freezes on your bank accounts? Bankruptcy may be the answer to your overwhelming financial problems. If you are considering filing for
Chapter 7 or
Chapter 13 bankruptcy, you likely have many
questions. It is hard to know if bankruptcy is the right option for your situation, and you must also consider if a Chapter 7 or Chapter 13 bankruptcy will benefit you now and in the long run. To add to the confusion, there are several myths regarding bankruptcy that can make things even more difficult.
A Long Island bankruptcy attorney at Jacoby & Jacoby can help. Because we have so many years of experience in this area, we are able to offer our clients sound legal advice in regards to bankruptcy, foreclosure and debt management in New York. We help clients throughout Long Island, Nassau and Suffolk and have six office locations for your convenience.
Below, we have listed a few of the top bankruptcy myths. We also welcome you to contact a Long Island bankruptcy lawyer at our firm to discuss your unique situation.
The Truth about Bankruptcy in New York
You will lose everything.
Truth: Many clients who work with a bankruptcy attorney from our firm will not lose anything! Although you may have heard that you will lose all of your property, assets and money if you file for bankruptcy, this is simply not true. By working with an attorney, you can help to ensure that your assets are protected. Certain assets are exempt from liquidation in a Chapter 7 bankruptcy, and a Chapter 13 bankruptcy does not result in a loss of your assets. In any bankruptcy, you can keep certain property (such as your car or home) as long as you make an agreement with the creditor to continue making payments on it.
Even after you file for bankruptcy, creditors can still contact and harass you for the money you owe.
Truth: Once you file a petition under Chapter 7 or Chapter 13 of the Bankruptcy Code, the court will issue an order prohibiting creditors from contacting you to collect on the money you owe. You are immediately given protection from the creditors who have been harassing you for so long. This is referred to as an "automatic stay."
You will never have good credit again.
Truth: You can establish good credit again, even after a bankruptcy. At first, you may experience higher interest rates and larger down payments needed on anything you lease or buy, but by keeping your income steady and by paying your bills on time, you can establish good credit again. In fact, sometimes it works better for a person to file for bankruptcy instead of trying to make it through a financial situation without it. However, this is on a case by case basis, and thus it is important to contact a lawyer about your particular situation.
Both you and your spouse must file for bankruptcy.
Truth: If you are married, it is not required by law that you both file for bankruptcy. It is important for your attorney to evaluate your specific situation and determine whether you, or you and your spouse, should file for bankruptcy – based on what will be best for your financial future.
Bankruptcy will hurt your credit for 10 years!
Truth: Simply because bankruptcy may remain on your credit report for up to 10 years does not necessarily mean that it will have a negative effect on your credit rating and your ability to get credit for those 10 years. If you keep a steady income and pay your bills on time, it is possible to re-establish your credit in two to four years. If you have the money to make purchases, you can still buy the things you want. You just need to stay smart with your money, and you can rebuild your credit score.
Click on this link to learn more about filing for bankruptcy and the bankruptcy process: www.bankruptcyattorneyinnewyork.com