Myths & misconceptions
Don’t avoid it
Money is one of those subjects that makes most people uncomfortable. Despite it having such a huge impact on so many facets of life. People tend to avoid addressing financial problems head-on.
Happens to everyone
It is typical to hear people reveal the trials and tribulations of parenthood, struggles with family relationships and marriages or even their difficulties in the workplace. Not many people stand around the water cooler discussing how they are living paycheck to paycheck or how they are barely saving for retirement.
Don't be part of statistics
Many studies have identified finances as the number one contributor to divorce in this nation. It is one of the primary stressors in the life of any adult. No matter how much or little we have of it, we all struggle with money concerns during our lifetime.
Don't be embarrassed
Bankruptcy is a viable solution to many with money woes and hardships. It’s okay to ask bankruptcy questions. It is frequently a practical resolution to the number one stressor and problem so many of us face in our lives.
Most common bankruptcy questions
Your credit-worthiness is based primarily on your “credit score”. Most people experience that their credit score is at least average or about average within an 18 month period after their bankruptcy case has been closed. Lenders in the majority of cases do not care if you’ve filed bankruptcy so long as your credit score meets their guidelines. And, if you have a credit score that is in line with the national average, you are a candidate for obtaining loans for houses, cars, or other types of credit.
Whether you work for the government or a private company, your employer may not fire you, demote you or take disciplinary action against you because you have filed for bankruptcy. In fact, your employer cannot use any information regarding a bankruptcy as a means to evaluate your job performance. The impact on job applicants is a little different. No governmental agency can consider a bankruptcy filing of a potential employee as a basis not to hire.
Private companies can perform credit checks with your consent. Refusing to release this information can result in them not hiring you. More commonly done if you are seeking a job in accounting or one that would have access to payroll, checks or purchase orders. It would be important to be honest about your financial background when applying for jobs within the private sector so that the employer knows they are dealing with an honest candidate.
In almost all instances, you will not lose any of your assets. Congress had intended when it wrote the U.S. Bankruptcy Code that the average person would keep everything that they own when they file a bankruptcy case. Frequently in those cases, a good bankruptcy attorney will develop a strategy where you can keep even the most valuable of assets.
Three types of bankruptcy cases that can be filed by an individual or family (Chapter 7, Chapter 13 or Chapter 11). Generally speaking, one of the three types of filings will work for someone regardless of their salary. Bankruptcy affects all incomes and all walks of life. Unfortunately thing things that cause bankruptcy happen to even the highest income debtors. The U.S. Bankruptcy Code has cases available to anybody, despite their income.
As stated directly above, the amount of money you make is not the controlling factor on whether you will qualify for bankruptcy. If you are unable to pay your debt, then you are insolvent by definition. You will qualify for bankruptcy regardless of how much or little you make.
While bankruptcy filings do not get sealed and are a matter of public record. Chances are no one is searching the bankruptcy dockets for your name or corporation. Filings in Central Pennsylvania do not regularly get published in the newspaper. It’s unlikely that non-lawyers know how to search the court dockets and do not have access to do so electronically. In order to find out who has filed for bankruptcy. There isn’t a notice that goes to your employer or anybody else you know unless you owe money to them. Bankruptcy is a very private thing and it does not need to be known by anybody but you and your attorney.
Understanding that every case is different. Filing for bankruptcy is often the first step towards becoming financially stable if you are drowning in debt. Becoming financially stable, qualifying for loans and maintaining a healthy debt ratio is possible when you allow time to recover and rebuild.
While it is true that bankruptcy will stay on your credit record for a period of 7 –10 years. Keep in mind, you will still be able to increase your credit rating almost immediately. Most people find that their credit score actually improves within a year or two after filing bankruptcy. You can still obtain loans and credit cards. Rather than thinking about bankruptcy as a permanent action that will follow you forever. Think of it as a less stressful way to eliminate your debt.
Bad things happen to good people. You probably never thought you’d be in this predicament. It becomes mathematically impossible to pay back the debt that you have. It’s probably irresponsible not to consider bankruptcy. Not filing bankruptcy at a time when you should, can cause your debt to stick around longer. Causing a more long-lasting effect on your family. Getting a fresh start through bankruptcy is often times the most financially responsible thing when faced with true financial hardship.
There may be limits on the amount of time between bankruptcy filings. A person must wait a minimum of 4 years in most cases before they can refile. However, Congress understands that many people experience financial hardship many times in their lifetime. For that reason, Congress kept that in mind when drafting the U.S. Bankruptcy Code. There are no limits on how many times a person can file in their lifetime.