Bankruptcy Myths & Freqently Asked Questions
I heard that there is a new law that says I can’t file bankruptcy now. Is that true?
No, that is not true. You can still file bankruptcy! It is much more difficult to qualify for a bankruptcy now, however. Typing services cannot provide the assistance you will need. But, an experienced attorney can lead you through these new requirements.
I still owe money on my car. I heard that I can’t keep my car if I file bankruptcy. Is that true?
No, that is not true. If you can afford to make payments on the car, you can probably keep it in either a Chapter 7 or a Chapter 13. A Chapter 13 may reduce your car payments and excuse you from catching up on the past-due payments.
I owe income taxes, but I guess I can’t wipe out what I owe to the government. Is that true?
No, sometimes you can wipe out taxes, such as some older taxes and some tax penalties. Newer taxes that can’t actually be wiped out can still be put in a Chapter 13 plan that stops the IRS and FTB from garnishing your wages, provides for their repayment, and often stops interest and penalties from accruing on them.
My wages are being garnished by a credit card company that sued me. Is it too late to file bankruptcy and stop this garnishment?
No, you can still stop the garnishment if you file bankruptcy. Sometimes you can get a refund after you file the bankruptcy of the most recent amount garnished.
I don’t have much – just normal household furniture, a couple of cars, and a little savings. Would I lose everything if I file bankruptcy?
If you just have normal items, chances are very good that you will be able to keep everything. An experienced attorney will be able to tell you if all your assets will be protected if you file bankruptcy.
I heard that under the new law I can only file Chapter 13. I don’t want a Chapter 13 because I can’t afford to pay all my debts back. What can I do?
Most people will still be able to choose either a Chapter 7 or 13. A Chapter 13 does not require full debt repayment in most cases. In fact, sometimes a person saves more money in a Chapter 13 than a Chapter 7. An attorney who is experienced in filing both Chapter 7s and Chapter 13s will be able to explain this to you.
I filed bankruptcy in the early 1990s, but now I have a lot of medical bills. I heard that you can only file bankruptcy one time in your life. Is that true?
No. There are a few restrictions if you filed a prior bankruptcy within the last 8 years. The rules are so complicated that only an experienced bankruptcy attorney should explain this to you.
My friends at work told me I shouldn’t file bankruptcy. They said I couldn’t get a credit card or a car loan for seven years. Is that true?
No. Banks and finance companies will probably offer credit to you fairly soon. Why? Because they want to make money from you and they can’t do that if they don’t loan you money. Check the interest rates, though. Be careful not to get over-extended after you file bankruptcy.
(c) 2006 Gold and Hammes, Attorneys
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