Bankruptcy FAQ

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Mark A. Seff
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Hollywood, FL 33020
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Mark Seff Divorce Attorney Home Page About the Law Offices of Mark Seff Learn What You Can Do about Bankruptcy Description on What We Do with Family Law Directions on How to Get to Our Law Office Multiple Ways to Get in Touch with Us

 

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Bankruptcy FAQ by the Law Offices of Mark Seff
Bankruptcy FAQ

Bankruptcy FAQ

Sometimes, a fresh start makes sense–if you can get past what you think you know. Bankruptcy FAQ by south Florida bankruptcy attorney, Mark Seff

Here’s a simple list of the most common Bankruptcy FAQ's. See how bankruptcy affects your credit and your possessions.

Bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment, it’s not nearly as frightening once you know the truth.


1. ALL DEBTS ARE WIPED OUT IN BANKRUPTCY.

Certain types of debts cannot be erased. They include child support and alimony, student loans and debts incurred as the result of fraud. If you’ve defrauded someone and a judgment has been obtained against you, they won’t be erased either.

2. MY FILING WILL BECOME PUBLIC KNOWLEDGE.

Unless you are a prominent person or major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors.

3. I'LL LOSE ALL OF MY PROPERTY.

This is the misconception that keeps people who really should file for bankruptcy from doing it. While the bankruptcy laws vary from state to state, Florida has exemptions that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing.

4. I'LL NEVER GET CREDIT AGAIN.

Quite the contrary. It will not be long before you are getting credit card offers again. They will just be from lenders that may charge high interest rates. However, if you are planning to buy a house or a car, you might want to do that before you file. Those loans will be tough to get, and the higher interest rate on such a large purchase would make a significant impact on your payments. Also, if you have a credit card with a zero balance on the day you file for bankruptcy, you do not have to list it as a creditor since you do not owe any money on it. That means you might be able to keep that card even after bankruptcy.

5. IF YOU'RE MARRIED, BOTH SPOUSES HAVE TO FILE FOR BANKRUPTCY.

Not necessarily. It is not uncommon for one spouse to have a significant amount of debt in their name only. However, if spouses have debts they want to discharge that they are both liable for, they should file together. Otherwise, the creditor will simply demand payment for the entire amount from the spouse who did not file.
For More Bankruptcy FAQ Specifically on
Chapter 7 - Click Here


6. ONLY DEADBEATS FILE FOR BANKRUPTCY.

Most people file for bankruptcy after a life-changing experience, such as a divorce, the lose of a job or a serious illness. They have struggles to pay their bills for months and just keep falling further behind.

7. I DO NOT WANT TO INCLUDE CERTAIN CREDITORS IN MY FILING.

It is important to me to pay them back someday and if the debt is discharged, I can not ever repay them. You are no longer obligated to repay them, but you always have that opportunity. If your conscience will not let you sleep nights because you did not pay your debts, there is nothing in the bankruptcy code that prevents you from doing that once you are back on your feet. But bankruptcy is an all-or-nothing deal, so you have to include all your creditors in the petition.

8. FILING FOR BANKRUPTCY WILL IMPROVE MY CREDIT RATING.

Because all those debts will be gone. Filing for bankruptcy is the worst “negative” you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for ten (10) years.


9. YOU CANNOT GET RID OF BACK TAXES THROUGH BANKRUPTCY.


Generally speaking, this is true. However, there is such a thing as tax bankruptcy. To get a shot at it, you have to file all your returns and the taxes owed need to be at least three (3) years old.

10. YOU CAN ONLY FILE FOR BANKRUPTCY ONCE.

The truth is, you can only file for Chapter 7 bankruptcy once every eight years. For Chapter 13 reorganization, you can file more often than that, but you can not have more than one case open at the same time.

11. I CAN MAX OUT ALL MY CREDIT CARDS.

I can file for bankruptcy and never pay the credit card companies for the things that I bought. That is called fraud. The credit card companies in your case will review all your purchases right before your filing. They know what to look for and they can file objections to your bankruptcy discharge.

If we haven't answered your questions with our Bankruptcy FAQ, contact us today!

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