EVERY. SINGLE. DAY. People find some crazy reason to talk themselves out of filing bankruptcy even though it will change their life for the better. Every day there are people who DESPERATELY need to file bankruptcy and they always come up with some parade of horrors that they’ve created in their mind about why they just CAN’T file bankruptcy. A lot of these are heartfelt reasons, but they’re wrong. Below are the 4 most common reasons we hear about why people think they shouldn’t file bankruptcy.
Bankruptcy is going to ruin my credit for a decade or more.
WRONG.
Yes, it will be on your credit report for up to 10 years. Some people think that bankruptcies are there forever because they’re a matter of public record, and they are. However, most people I know wouldn’t know how to lookup a bankruptcy if their life depended on it so you shouldn’t really worry about that unless you plan on running for President.
What you really mean is that three digit number that you’ve suddenly become aware of, your credit score. Remember when you used to live in blissful ignorance of that credit score, I know I used to. Well, the good news is that you can probably plan on that score returning to the 700+ range within a couple of years after filing bankruptcy, assuming you’ve actually been paying your bills on time.
The bottom line is this, the night is always darkest just before the dawn, same thing with your credit score. Your credit score will most likely be at its absolute lowest point just before you file bankruptcy. Every bill you pay on time after filing for bankruptcy will just be a positive mark on your credit report and thus, your score will start to creep up.
If I File for Bankruptcy They’ll take my House
Not necessarily.
People who are likely to lose their homes in bankruptcy are also just as likely to lose them if they don’t file, it might just take longer. Many homes are still either underwater on the mortgage or they’ve got so little equity that the Chapter 7 trustee wouldn’t even bother with it. If you’re looking at a Chapter 13, you can keep your house and get the mortgage current. You could also potentially even strip off a second mortgage and permanently discharge them for vastly less than otherwise.
I Owe Back Taxes, what Good is Bankruptcy Going to do for me
Quite Possibly Save You From Financial Ruin.
Literally nothing gets stuck in my craw like this statement. In fact, Bankruptcy is one of the only ways to permanently get rid of back taxes. The IRS is truly one of the most vicious organizations out there. They keep coming back year after year, they can take your home, your bank accounts and even throw you in jail. The likelihood of them settling your tax debt, even with one of these ripoff tax settlement scam companies, is about the same as you winning People’s sexiest man/woman alive. In other words, don’t bank on it. In certain circumstances, taxes are dischargeable in bankruptcy if they meet the tests under specific rules set out in the bankruptcy code. Not all taxes are dischargeable but under certain circumstances that only a good bankruptcy attorney can tell you, they are able to be discharged.
I make too much money and I’ll be forced to repay everything in a Chapter 13
Not necessarily.
This might be true, but it might not. Before arriving at this conclusion you should always seek the advice of a competent bankruptcy attorney. Only after consulting with a GOOD bankruptcy attorney will you be able to better understand what will actually happen. It may be that you’ll actually come out better by filing a Chapter 13. Many Chapter 13 plans play very little or nothing to unsecured creditors (credit card companies, medical bills). A chapter 13 Bankruptcy is generally termed a repayment plan but in all honesty, that doesn’t mean you’ll have to repay everyone.
In the end, you’ll only know if bankruptcy is a good idea for your situation if you come in and meet with one of our qualified attorneys who will sit down and analyze your situation, free of charge, and tell you what the best path is. Sometimes it’s bankruptcy and sometimes it’t not. We won’t steer you the wrong way, even if it means you not filing with us and paying us one red cent. Contact us today to set up an appointment to meet with one of our attorneys. We have over 35 years of experience in helping people find relief from burdensome debts.