Common Myths about Bankruptcy in Florida

Below is a list of the most common myths about Bankruptcy in Florida by Sunshine State Bankruptcy. Do not let rumors and wise tales distract you from the truth about bankruptcy. Learn for yourself what is real about filing for bankruptcy.

Myth 1: Everyone will know I have filed for bankruptcy!

Yes, your bankruptcy is a matter of public record. Anyone, with a lot of time on their hands, could check the public record to learn who filed for bankruptcy. But the simple fact is that, unless you are Donald Trump (who actually sought the protection of bankruptcy), no one cares! There will be no scarlet “B” emblazoned on your shirt when you file! No sticker will appear on your car, your house or your driver’s license any more than Sam I Am was required to wear a T shirt that read “I do not like Green Eggs and Ham!” The reality is that there are hundreds of thousands of Floridians just like you filing for bankruptcy every year. Unless an entity like the FBI is working on deep background regarding your activities, there is little likelihood anyone will know, or care, that you filed for bankruptcy. That’s why you don’t see lists of people who have filed for bankruptcy in the newspaper. You don’t see television shows about people who have filed for bankruptcy. Do you hear the names of people who have filed for bankruptcy featured on your favorite radio show? Of course not! About the only way people will know that you have filed for bankruptcy is IF YOU TELL THEM! You would probably be surprised at how many people you know who have filed bankruptcy. They just haven’t told you.

Myth 2: Everything you own and have worked for will be gone if you file for bankruptcy!

Here in Florida, certain types of property are “exempt” by law. For instance, under Florida law, your house is exempt and cannot be taken from you! Florida law protects your house, your car or truck, your household goods, IRA’s, retirement plans, cash value of your life insurance, wages and even workers’ compensation claims. The exemptions do not vary if you are filing a Chapter 7 or a Chapter 13, but what does vary is what you are allowed to keep. If you have more property than can be protected under Chapter 7, you may have to file under Chapter 13. The advantage of Chapter 13 is that you can keep this property by paying back more to your secured creditors. That does not mean filing for bankruptcy will get rid of the mortgage or the lien on your vehicle. If you want to keep your house or vehicle and are behind in your payments, Chapter 13 will help you take care of those back due payments but you will have to keep on making the payments on your house or car as part of yourChapter 13 bankruptcy plan. You will be able to keep your house or car so long as you make your payments.

Myth 3: You will Never again be able to Own Anything in Your Life.

This is one of the strangest but common myths about bankruptcy. After you finish your bankruptcy you will get what is called a “discharge in bankruptcy”. The discharge is what gives you a fresh and new start. It is your forgiveness! After you get the “discharge”, you can buy whatever you can afford. If you can afford it, you can own it, including green eggs and ham!

Myth 4: Your credit has been ruined for life and you will never, ever, get credit again!

Your creditors would like for you to believe that if you don’t pay every dime you owe them you will never, ever, get credit again. In fact, the exact opposite is true! Why? The purpose of bankruptcy is to get rid of your debt and give you a fresh start. The bankruptcy discharge makes you more attractive to banks and even credit card companies. You are going to get a mailbox full of offers for credit cards. You may well be offered a higher interest rate, and your minimum payment will likely be higher than before. But you will have been given a fresh start one of which you should take advantage. That means that you should work, save money, pay your bills on time and in full. Doing all these things will not only help restore your credit but, within 2 to 4 years, your credit will get better and better. It is not at all uncommon for people to buy cars or trucks after their bankruptcy!

Myth 5: Only bad people or deadbeats file for Bankruptcy!

This is another myth your creditors want you to believe! But the opposite is true! Over 750,000 Americans file for bankruptcy each year! Each year! Are they bad people who have a scarlet “B” on their chests? No! And, they are not deadbeats. Look, everyone wants to pay their debts AND provide for their family. Everyone wants to act responsibly. Sometimes, circumstances make that impossible and you have to decide what is more important?So what exactly is acting responsibly in your world; feeding and housing your family or buying some credit card executive a new yacht? Acting responsibly may dictate that you file for bankruptcy because it is the only way to protect yourself and the ones you love. Just because you have lost your job, have medical expenses, family problems, a failed business, or have just made a bad financial decision doesn’t make you a bad person. As we pointed out, the bankruptcy laws were created for just this type of situation. Filing for bankruptcy gets rid of certain types of debt and frees up money for you to take care of your family and get back on your feet. Helping your family and getting a fresh start is what the bankruptcy law is all about. It is for you and your family! Don’t pass up your chance for a fresh start by believing creditor myths about bankruptcy. A deadbeat is a person who continues to pile up debt with no way of ever paying it off. A deadbeat does not know how to manage money and spends money without regard to what is best for his or her family. Deadbeats don’t care about family. It is good, responsible people who file for bankruptcy as a way of getting a second chance for themselves and their families. Don’t let your creditors deceive you.

Myth 6: OK! I was wrong. My credit isn’t destroyed for life. Only 10 years!

Let’s be frank. By the time you contact a bankruptcy lawyer for help, you already have credit problems. You may have maxed out your credit or may not have any credit at all. Bankruptcy is not going to change credit that is already messed up. Sorry, but this is the truth! So, how do you fix your credit? While it is somewhat counter-intuitive, filing for bankruptcy can actually allow you to improve your credit. Yes, your bankruptcy will be noted on your credit report for 10 years. But get past that! The issue is whether or not a bankruptcy will have a negative impact on your credit. The answer depends on you! If you take the steps to restore your credit, within 2 – 4
years the fact your credit history still shows an old bankruptcy filing will be of little importance. Why? It isthe choices you make after you have been given a fresh start that matter most to creditors who are considering loaning you money!

Myth 7: My spouse will have to file for bankruptcy with me and we will both be ruined!

There is NO REQUIREMENT under the bankruptcy law that both husband and wife must file for bankruptcy! In many cases, only one spouse is having problems and only that spouse needs to file for bankruptcy. We leave the other spouse out of the bankruptcy filing. There are, however, cases where both the husband and wife each accumulated a lot of debt. In those cases, it makes sense and saves money for both to file for bankruptcy. But NO ONE can make both spouses file for bankruptcy.

Myth 8: It is hard to file for bankruptcy!

What is hard is getting past all the myths your creditors want you to believe and making the decision to file for bankruptcy. Remember Sam I Am!! Once you make that crucial decision to make a fresh start, filing for bankruptcy is easy if you have the right bankruptcy attorney who can provide you with quality professional legal services at a reasonable and affordable cost.

Myth 9: Even if you file for bankruptcy, you will still be harassed by your creditors!

The minute you file bankruptcy, you are protected by the Bankruptcy Court’s “Automatic Stay”. This Automatic Stay tells all of your creditors to leave you alone or else. Your creditors are prohibited from taking any new collection actions against you. Your creditors even have to stop all collection attempts that they previously commenced once you file bankruptcy. In fact, your creditors aren’t even allowed to speak to you! The Automatic Stay, issued pursuant to United States Bankruptcy Code, Section 362, puts the United States Bankruptcy Court to work for you to make sure your creditors leave you alone. If a creditor violates the Automatic Stay, you can bring that creditor to court before the bankruptcy judge where he/she may be held in contempt of bankruptcy court. You could even be compensated. Bankruptcy Court Judges punish creditors severely if they ignore their Automatic Stay Order. An Automatic Stay provides you with automatic relief. You won’t be getting any more phone calls! You won’t be getting collection letters! You won’t be threatened nor have lawsuits filed against you! There won’t be any repossession of your cars, trucks, boats or motorcycles. And, best of all, there won’t be any foreclosures! Isn’t that a weight off your shoulders? Remember, once Sam I Am tried the green eggs and ham, the incessant harassment stopped!

Myth 10: Filing for bankruptcy is going to lead you to a divorce.

You and your spouse are good, honest, hard-working people. Being unable to pay your bills jeopardizes your family’s future, happiness and prosperity. Unless you do something to relieve this pressure cooker, the debt could destroy your marriage.The stress and anxiety of being unable to pay your bills or provide for your family can destroy even the happiest of marriages. Filing for bankruptcy will help lower your stress and it is the first responsible and honorable step you can take for your family. It is your fresh start! You now have my permission to give your spouse a big hug and kiss and tell them everything will be OK!

Myth 11: You only have one chance to file for bankruptcy in your lifetime!

It’s my sincere hope that filing one bankruptcy will give you the fresh start you and your family need. The truth is that you can be eligible for a “discharge” under Chapter 7 once every 8 years. Some people get confused about the difference between a dismissal and discharge. If your case is dismissed because you didn’t take all the steps to complete your bankruptcy within 12 months, there will be problems with Automatic Stay protection. If your prior bankruptcy case was dismissed, there isn’t any wait time between bankruptcy filings. It is important that once you file for bankruptcy, you complete the entire process, resulting in your discharge which gives you a fresh start.

Myth 12: I can pick and choose the debts and properties that I want to put into my bankruptcy petition.

The bankruptcy law requires that you list all of your property and debts, even if you want to keep on paying off a certain debt. The good news is that you can continue to pay on your debts, but you first have to list the debt. After bankruptcy, you can go back and pay anybody you want. You should know that even after you list your debts and file bankruptcy, there are some debts you must still keep paying . If you want to keep your car, truck or house, for instance, you will have to list the debt and continue paying it off. Remember, however, that so long as you stay current on the debt and keep the property insured, you are protected under the Bankruptcy Law. That is, you get to keep your property!

Now that you know the truth about most of the common myths associated with bankruptcy, don’t let yourself be overwhelmed by debt. Call Sunshine State Bankruptcy Law Firm today to schedule your complementary no obligation consultation about financial needs.