Bankruptcy Myths Debunked

Our Schaumburg Bankruptcy Lawyers Provide the Truth

What is True and Not True About Bankruptcy?

There is a lot of misinformation about bankruptcy — and that misinformation often keeps people from doing what they need to do when facing insurmountable debts. There is a way to learn about the truth of bankruptcy: talk to an experienced Schaumburg bankruptcy attorney at U.S. Law Attorneys, Ltd.

Bankruptcy Myths

Our Schaumburg bankruptcy attorneys meet people every day who know they need debt relief, but who are afraid that bankruptcy might ruin their credit or cost them their homes. Do not believe the bankruptcy myths. Ask an experienced bankruptcy attorney for the facts.

• Will bankruptcy ruin your credit? Probably not. Maybe relying too much on credit has hurt you. It has certainly hurt our economy. Bankruptcy can help you. By the time you are ready to file for bankruptcy, you have already fallen behind on regular payments and that means a bad credit report. Bankruptcy will not make an already poor credit report so much worse. But bankruptcy can clear unpaid credit, helping you rebuild credit, stronger.
  • Filing for bankruptcy will stop the 30 days late, 60 days late, 90 days late, 120 days late buildup in your credit report. Bankruptcy will stop the late payment reports.
  • Judgments and charge-offs can hurt your credit, but bankruptcy eliminates those judgments.
  • Yes, it is possible that your credit scores will take an immediate drop with a bankruptcy, but within one to three months, you can begin to rebuild your credit. With a discharge of your debt, you can actually improve your credit score by removing unpaid balances and high credit limits.
• Will you lose your home? No. Keep your home. Most people believe they will have to sell their homes in a Chapter 7 bankruptcy, but you are allowed to keep a certain amount of exempt property. In today’s market, if you have a home valued at $200,000, for example, and you owe $200,000 on the home, the bankruptcy trustee would get nothing out of selling the home, so you can keep it. If you do have equity, bankruptcy exemptions will allow you to protect some or all of that equity, depending on how much.
  • Even if the mortgage company has started foreclosure, bankruptcy can forestall the foreclosure and provide a solution that might enable you to keep your home.
• Will you lose your car? In many cases, you can keep your car in a bankruptcy. You do not have to walk away from your car unless you can no longer afford the payments. Even if you are behind on your car payment, if you can afford to repay going forward, there are bankruptcy options for you.
• Will you go to jail? Absolutely not. A number of people are worried that bankruptcy will put them in jail – but bankruptcy is a federally-mandated form of debt relief, and owing money is not a crime. While people who commit bankruptcy fraud can go to jail, those who use the system legally and fairly will not.
• Can you remove taxes with bankruptcy? Yes, sometimes. The rules are very technical, but we can help you with the details. Maybe we can get those state and IRS taxes discharged.

Bankruptcy is a much-needed solution for people who have no hope of paying their debts. Know the facts about bankruptcy, not the myths. Contact us for a free consultation with an experienced Schaumburg bankruptcy lawyer.