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Common Myths

A personal bankruptcy is hard or near impossible to file. – False

Bankruptcy relief is alive and well in both Chapter 7 and Chapter 13. While it is true that Congress changed some of the requirements and rules regarding bankruptcy, many of the rules and procedures are very much the same. An example of one the new requirements is all individuals are required to take a counseling class prior to filing bankruptcy. This counseling class can be taken over the phone or on the internet, and the class usually takes between 45 minutes – 1 hour.

If you file bankruptcy, you will lose all of your personal belongings. – False

Personal belongings such as your car, jewelry, and household goods are generally protected by state and/or federal exemptions.

Because the bankruptcy laws changed in 2005, you can no longer eliminate credit card debt. – False

This is simply untrue. The 2005 amendments to the Bankruptcy Code did not eliminate a person’s ability to eliminate credit card debt.

If you enter into a bankruptcy payment plan, you have to pay all your debt back. – False

Many individuals that file a chapter 13 bankruptcy do so to save a house from foreclosure or to keep a vehicle from being repossessed. However, filing a chapter 13 bankruptcy does not necessarily mean you will be required to pay back credit card and medical bills. Your current monthly income is the predominant factor in determining whether you must pay all, none, or a portion of your unsecured debt, such as credit cards, payday loans and medical bills.

You are only allowed to file bankruptcy once. – False

Individuals generally file a Chapter 7 or Chapter 13 bankruptcy. Depending on the chapter and the amount of time that has passed since the first bankruptcy, an individual may be eligible to file another bankruptcy. For example, if an individual filed a Chapter 7 bankruptcy and received a discharge, he/she would be eligible to file another Chapter 7 bankruptcy in 8 years. If the individual filed a Chapter 13 bankruptcy and received a discharge, he/she would be eligible to file another Chapter 13 bankruptcy in 2 years.

There is no life after bankruptcy. – False

A bankruptcy filing will stay on your credit report between 7–10 years depending on the chapter of bankruptcy that you file. However, this does not necessarily mean you will be turned down by a lender when you apply for credit. In fact, some clients find that it is easier to obtain financing after bankruptcy because their unsecured debt has been discharged. Additionally, individuals may choose to reaffirm secured debt such as their car or house which will help to rebuild their credit.

At the Law Office of Areya Holder, P. C., we genuinely care about you and take your financial situation seriously. We realize that in many cases, you have exhausted all other resources and have nowhere else to turn. Allow us to work with you to resolve your debt and help you regain hope for a stable financial future. Call (972) 438–8800 today or contact us online to arrange a confidential consultation.

Serving clients in Dallas and Tarrant counties, including the communities of Irving, Las Colinas, Dallas, Plano, Arlington, Grand Prairie, Carrollton, Euless, Cedar Hill, and DeSoto.