Menu Locations
Law Offices of Todd M. Friedman, P.C.
Free Initial Consultations
Toll-free:TF 877-619-8966
California:CA 424-285-6006
Illinois:IL 312-292-9296
Ohio:OH 216-220-6496
Send an SMS

7 Bankruptcy Myths Cleared Up

1. Bankruptcy Will Permanently Ruin My Credit.

Bankruptcy stays on your credit history for ten years at all three major credit reporting agencies, but your credit score is updated and recalculated at least four times a year by these same agencies, based on many factors.  The credit agencies give more weight to the most recent payment history. As your bankruptcy becomes older, it’s weight decreases and after 10 years it will completely disappear. In addition, by filing bankruptcy, you can stop further negative reports which would depress your score even more, such as judgments.

Many people are surprised to receive offers of new credit cards after coming out of bankruptcy. It is not unheard of for people who made all their payments promptly after bankruptcy to have good credit scores in just a few years after filing for bankruptcy. Donald Trump (filed 3 times), Henry Ford, and Walt Disney all filed and were plenty successful even with the bankruptcies.

 

2. Everyone Will Know I Have Filed For Bankruptcy.

Bankruptcy court records are public, but most people other than the media looking for celebrity gossip, have more pressing issues than to sift through thousands of bankruptcy records looking for you.  This being said, unless you are famous, you and your creditors will most likely be the only ones who find out, unless you tell someone.

3. I’ll Lose Everything I Have If I File For Bankruptcy.

Most people keep most or all of their property. 401(k) and IRA savings, and SSI or Social Security payments, if applicable, are not touched.

In Chapter 13 bankruptcy, you can generally keep everything, in return for paying what you can afford on your debts for either three or five years after meeting your day-to-day living expenses.

In Chapter 7 bankruptcy, you do not have to make any payments, but are forgiven all of your debts except for a very few exceptions, such as child support. You can keep your house and car if you can keep up the payments and do not have too much equity in them. Unless you have a lot of expensive art, antiques, etc., you can usually keep all your personal effects and property, up to certain limits, through a exemptions.

 4. I Will Never Be Able To Own Anything Again.

You can own anything you can afford after bankruptcy. Some people can qualify for mortgages at good interest rates in just a few years after filing for bankruptcy, as long as they don’t get into trouble with their credit again. Among the famous people who have filed for bankruptcy and later gone on to own things are Donald Trump, Henry Ford, H.J. Heinz and Walt Disney.

5. Bill Collectors May Still Harass Me After I File For Bankruptcy.

Creditors are not even allowed to contact you without permission as soon as your case is filed. If you are being sued, and a court date has been set, the creditor’s lawyers must immediately stop all proceedings. No more collection efforts may occur on any account. If a creditor attempts to collect from you after you file, you have the right to sue them!

6. Will I Lose My Job If I File For Bankruptcy?

Bankruptcy law prohibits your employer from firing your solely because you filed for bankruptcy. It even prohibits your employer from firing you if you discharge a debt in your bankruptcy that you owe to your employer. See 11 U.S.C. 525(b).

7. Can I Be Denied a Student Loan Because of My Bankruptcy?

No! You cannot be denied a student loan because of a bankruptcy filing.

If you are having trouble making ends meet due to debt issues, please give my office, The Law Office of Todd M. Friedman, a call today and will discuss whether filing Bankruptcy is the right decision for you.

 

 

 

No Comments

Leave a comment
Comment Information

When You've Had Enough, Contact Us For A Free Initial Consultation

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Get An Attorney Response

Headquartered in Beverly Hills, we accept cases throughout California, Pennsylvania, Illinois, Ohio and West Virginia

Schedule a Free Consultation:
Toll Free: 877-619-8966
| Local: 424-285-6006 |
Fax: 866-633-0228
| Email Our Firm


  • Law Offices of Todd M. Friedman, P.C.
    324 S Beverly Blvd, Suite 725
    Beverly Hills, CA 90211

    (Mailing Address Only)

  • Orange County Office
    245 Fischer Ave., Suite D-1
    Costa Mesa, CA 92626
    Map & Directions

  • Woodland Hills Office
    21550 Oxnard St
    Suite 780
    Woodland Hills, CA 91367
    Map & Directions

  • King of Prussia Office
    1150 First Ave., Suite 501
    King of Prussia, PA 19406
    Map & Directions

  • Chicago Office
    111 West Jackson Blvd., Suite 1700
    Chicago, IL 60604
    Phone: 312-292-9296
    Map & Directions

  • Ohio/West Virginia Office  
    Fifth Third Building, 600 Superior Avenue East,
    Suite 1300, Cleveland, OH 44114
    Phone: 216-220-6496
    Map & Directions