Myths

Bankruptcy is a form of debt relief which helps debtors through the legal process to wipe out their debts through Chapter 7 Bankruptcy or consolidate and repay them through Chapter 13 Bankruptcy.  Here you can find out what is actual myths vs. what are actual facts:

Myth #1: Debtors will lose everything they have by filing for bankruptcy

This is a MYTH. While it may seem that when your file for bankruptcy you may lose everything such as your home, car, personal belongings, and retirement this can most certainly be a large concern for those who are dealing with mounting debt.  You may not know this but, a vast majority of bankruptcy filers don’t lose anything! Moreover, there are types of bankruptcy which can protect your possessions. For instance, you can file Chapter 13 bankruptcy to help save your house from foreclosure while  you catch up on back payments.  In a Chapter 7 Bankruptcy you are able keep your house and cars by reaffirming  the debt.   A reaffirmation is when a new contract is signed between you and your lender that reaffirms the debt and personal liability you have for the obligation.  Thus, you being able to keep your possession.

One myth debunked more to come.......

Filing Chapter 7, and Tax Returns

Did you know that it’s best to wait to file Chapter 7 bankruptcy until you file your taxes?   We tell our clients to file your tax refund, and spend it on necessary expenses.  Why is this a good idea?  Depending upon when you file, the bankruptcy trustee is going to take some or all of your tax refund to pay your creditors.  Spending your tax return before filing Chapter 7 bankruptcy is recommended, However remember that you need to be cautious as to where your tax refund is spent.  So where do you spend your tax refund?  Your tax refund should be spent on necessary expenses prior to filing.  Necessary items may include groceries, utility bills, mortgage or rent, and bankruptcy attorneys’ fees.  Stay tuned more to come….