Bankruptcy Myths Debunked
By Bob Jacquard, Esquire
Myth: You won't be able to borrow money
for at least ten years following a bankruptcy.
Truth: You can rebuild your credit score immediately. Some
ways to rebuild your credit include taking out secured loans and credit cards,
and making your payments on time. Many lenders consider you to be a better risk
after a bankruptcy.
Myth: You will lose your house to
foreclosure and your car will be repossessed.
Truth: Property exemption is common in
bankruptcy filings. You can exempt your mortgage, car loan, and any other debt
for property. In short, you can keep your home and car, as long as you continue
to pay the bills.
Myth: You will never get a mortgage
approved so you can move out of your apartment.
Truth: Nobody's credit history is perfect,
and lending institutions approve mortgages for people who have filed bankruptcy
every day – often within the first year after filing.
Myth: Bankruptcy is a form of theft and
cheating the system.
Truth: America was founded on the very
belief in fresh starts. Most people have repaid their original credited amount
by the time they decide they can't keep up with excessive interest payments and
late fees.
Before filing bankruptcy
By Bob Jacquard, Esquire
If you can't decide whether to file, consider these
questions:
- Are
you paying more than 25% of your family take-home pay to creditors?
- Are
you juggling credit payments and accumulating late fees by not paying?
- Have
you opened a new credit card account to pay off a higher-interest old one?
- Have
you taken a credit card cash advance to pay bills?
- Are
you making minimum monthly payments on more than one credit card?
- Have
you put off paying bills because of an unexpected expense?
- Are
you still paying for holiday gifts purchased more than one year ago?
- Have
you refinanced your house in order to “catch up” on your credit bills?
- Are
you arguing more about money than you did a year ago?
Answering
yes to any of these questions means that you could be sinking into a credit
hole. Millions of Americans have started a new life by filing bankruptcy.
Chances are many of your friends, neighbors, and co-workers have.