When people are contemplating whether to file for bankruptcy - whether a Chapter 7 or a Chapter 13 - there are a great number of things to consider.
Orange County Chapter 7 Bankruptcy Lawyer Vincent Howard believes no one should be pushed into a decision one way or another. But in order to make the right choice, you need to be informed.
Unfortunately, there seems to be more bad information out there than good.
Our experienced Orange County bankruptcy lawyers want to set the record straight on a few things.
In this first of a two-part blog series, let's begin to break them down one-by-one:
1. You think everyone will know you filed for bankruptcy. While it's true that bankruptcy is technically a public legal proceeding, meaning the documents are public record, the chances that your name will be published by a local newspaper, let alone seen by someone you know, are slim. Of course, if you are a prominent person or if you head some major corporation, then yes, the news may be discovered by local media. But the number of bankruptcies being filed every day are inordinate, and most media outlets don't have the time or space to devote to them anymore.
2. You believe a Chapter 7 will completely wipe all your debts away. We wish it were that simple. Bankruptcy is going to help you with that massive credit card debt, underwater mortgage and ballooning medical bills. What you won't relieve you of is alimony and child support, student loans, restitution for a criminal act or debts that you incurred as a result of fraud.
3. You believe you'll never be able to get credit again. Wrong again. In fact, it probably won't be too long after your bankruptcy debts are discharged that you'll start to get credit card offers again. What you need to be wary of is the fact that these will be subprime lenders that are going to charge you through-the-roof interest rates. What you don't want to do is run up that bill again, because you won't be able to file for bankruptcy again for another 7 years. You're better off rebuilding your credit slowly and steadily.
4. You believe you're going to lose everything. This is an antiquated perception, and the fact of the matter is, bankruptcy is not going to force you into a homeless shelter or a cardboard box. It's true that some sacrifices may need to be made, but California has a list of bankruptcy exemptions, sometimes called asset protection. You can find some of these listed in California Code of Civil Procedure, Section 704.701. There are homestead exemptions, as well as property exemptions that can include everything from your jewelry to your burial plot and even money you may have received as a result of a previous personal injury claim.
5. You believe that if you're married, both of you have to file for bankruptcy. Again, this is not true. In fact, it's not even rare that one spouse would have a lot of debt in his or her name, while the other doesn't. In these cases, it can be smart for only one of you to file. However, in cases where the debt may be in both names, you might be better off both filing, otherwise the creditor is simply going to go after the spouse who didn't file.
Orange County Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
12 myths about bankruptcy, Staff Report MSN Money