The Six Myths Your Credit Card Company Wants You to Believe About Bankruptcy

Credit card companies like Visa, MasterCard, Discover Card want to keep you in debt and they perpetualize a number of myths to prevent you from seeking their protection under the bankruptcy code.
They’ve got you running scared full of misconceptions and myths and they want to keep you in the dark. At Sunshine State Bankruptcy, we pull back the curtain and expose these misconceptions and myths. Let’s take them on one by one:

  • Only deadbeats file for bankruptcy. Let’s face it, many Floridians file for bankruptcy because of serious illness or injury, job loss or even divorce. You want to pay your debts, but you are struggling falling behindMyths About Credit Card Bankruptcy every month in an effort to pay your bills. You may take cash out of your savings account, retirement funds or even borrow money from family and friends trying to keep your head above water. Bad things happen to good people and you should take heart in the biblical basis for bankruptcy.
  • Everyone will know I filed for bankruptcy. US Bankruptcy Court filings are public records, but unless you are Donald Trump, Burt Reynolds or a large corporation like Chrysler, no one cares. The people that will know are the most important people. That’s your creditors. By law, they will be notified of the filing and even better, they’ll be ordered to stop all collection efforts immediately. They are not allowed to contact you and harass you about your debt.
  • I’ll lose everything I have if I file for bankruptcy. When you file for bankruptcy, your assets go into what is called a bankruptcy estate. But the great news is that not all the assets or property that you own are part of the estate. In other words, there is property that is excluded from the bankruptcy estate depending on the state that you live in that can include not only your house, personal effects, cars and even guns.

In a chapter 7 bankruptcy, you will be able to keep valuable assets, including your home and car so long as the equity of those assets aren’t greater than the exemption amount in your state. In Florida, you can exempt a house that is your homestead, a car and personal property of value of $2,000. If you choose not to keep your home, or are renting, or exemptions are worth $5,000.

In a chapter 13 bankruptcy, you can reaffirm some of your debt and make payments over time in order to keep an asset. An experienced bankruptcy attorney will determine what assets you can keep and whether there are other ways that you will be able to keep valuable property. You don’t have to lose everything to bankruptcy.

  • It’ll destroy my credit if I file for bankruptcy. Let’s be realistic, if you are late on bills, have maxed out credit cards, your credit is already damaged. Amazingly, after bankruptcy, you’ll have a clean financial slate. Why? Because you have no remaining unsecured debt and you’ve undergone mandatory credit counseling as part of the bankruptcy process.

Even after filing for bankruptcy, many credit card companies will still issue credit card offers. Yes, they’ll have high interest rates, but you can get credit cards.

Another option is to get a secured credit card with a bank. You’ll be asked to put some money in a saving’s account to secure your future payments. If you prove that you are able to pay using your secured credit card, not only your credit card limit will be raised, but you will be restoring your credit.

  • My spouse will have to file bankruptcy with me. Did you know that it is possible for one spouse to file individually. You don’t have to file with your spouse. But of course, if you are thinking about bankruptcy, you should speak to an experienced bankruptcy attorney to make sure that your credit card company won’t hold your spouse liable for the balance on the cards if your cards are in both names.
  • I don’t need bankruptcy protection; there are other ways out. The TV stations are full of ads for debt consolidation companies, who for a price, will offer to help you with your debts. That’s a huge price to pay and the truth is that only bankruptcy can stop creditor harassments, law suits, halt foreclosures and repossessions and help you and your family secure a fresh financial start.

If you feel you are drowning in debt and have the weight of the world on your shoulders, you should contact Sunshine State Bankruptcy for a free, no obligation copy of our book, The Essential Guide to Bankruptcy and for a free half hour consultation.

 

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