Common Bankruptcy Myths
Ventura Bankruptcy Lawyers & Oxnard Debt Relief Attorneys Dispelling Your Fears about Bankruptcy
America is a land of opportunity, where people who have made mistakes can get a second chance at success and happiness. Yet, when it comes to bankruptcy, a powerful tool that has helped countless people get a new financial start, many people associate it with shame and failure. Would you consider Walt Disney, Henry Ford or Donald Trump a failure? These are all examples of people who have taken advantage of the bankruptcy laws that are protected in our Constitution and have been used for centuries to help people in financial crisis get a second chance at a fresh start.
The Law Offices of Michael H. Raichelson are dedicated to helping the people of Oxnard, Ventura County and Los Angeles County find solutions that restore financial health in the face of mounting debt and unpaid bills. We hope the following clears up myths in California bankruptcy and helps you understand what it can do for you.
Myth: If I file for bankruptcy, I will never be able to get a credit card or a loan ever again.
This is one of the most commonly held misconceptions about bankruptcy. Filing for bankruptcy can be a first step towards actually rebuilding your credit. After you file for bankruptcy, you will likely be getting credit card offers that you should carefully consider. Prudent use of a credit card can improve your credit, but you should consult with an experienced bankruptcy attorney since many will charge high interest rates that can quickly get you into trouble. Once you take steps to rebuild your credit, you might find yourself able to obtain a car and even a home loan, even with a personal bankruptcy on your record.
Myth: Filing for bankruptcy is a sign of failure and a source of embarrassment. Everyone will know.
While some newspapers do publish bankruptcy filings, the Ventura County Star does not. Unless you happen to be a former professional athlete or other celebrity, it is almost certain that only your creditors will be aware of your bankruptcy filing.
Most people file for Chapter 13 bankruptcy after life-changing events that are largely out of their control. A recent survey found that 62% of all personal bankruptcies in the United States are caused by medical bills, which can accumulate after an accident or some other misfortune. Many people file for bankruptcy after a divorce, a sudden loss of a job or a serious illness. Any of these events can wreck even the most careful financial planning and many hardworking, responsible people simply have struggled with bills and cannot get their heads above water. There is no shame in filing for bankruptcy; it is actually a sign that you are taking responsibility for your future and giving yourself a second chance.
Myth: I am going to lose everything I own.
While Chapter 7 bankruptcy is often called a “liquidation” bankruptcy, there are many exceptions in place in California that protect the very things most consumers are concerned about losing, including their home and automobile. An experienced Ventura County bankruptcy attorney can guide you through the bankruptcy laws and property exemptions to determine which ones apply to your financial situation.
Myth: Bankruptcy can eliminate every one of my debts.
Chapter 7 bankruptcy can indeed discharge a great number of personal debts which are considered “unsecured,” such as credit cards and medical bills. There certain types of debts which cannot be eliminated by Chapter 7 bankruptcy, including child support and alimony payments, government –issued student loans or debts you have incurred as a result of fraud. An Oxnard bankruptcy attorney can help you determine debts that can be eliminated by Chapter 7 bankruptcy and which ones cannot.
Myth: You can only file for bankruptcy once.
You may file for personal bankruptcy multiple times although there is a required waiting period between filings. You can file for Chapter 7 bankruptcy once every eight years and two years must pass between multiple Chapter 13 filings. If you are seeking to file for Chapter 13 bankruptcy after having previously undergone the process of a Chapter 7 bankruptcy, you must wait four years.
Myth: Bankruptcy works for consumer debt, but not for taxes.
This is also false. There are certain requirements that need to be met in order to eliminate tax debt through personal bankruptcy and The Law Offices of Michael H. Raichelson can help you determine whether you can discharge these debts. Typically, income taxes that became due over three years ago can be eliminated through personal bankruptcy.
Talk to an Experienced Bankruptcy Attorney about Your Options
If you are facing substantial financial difficulties and are considering filing for personal bankruptcy, contact the Law Offices of Michael H. Raichelson at 818-444-7770 for a free consultation to discuss your options and determine your best course of action.