Bankruptcy Myths

Tampa Chapter 7, 11 And 13 Bankruptcy Attorney

Bankruptcy is possibly one of the most misunderstood areas of law. Creditors are of no help in these situations, as they do their best to make you believe that bankruptcy will do you far more harm than finding a way to pay the debts you owe to them. If you or your company is considering bankruptcy and getting conflicting reports about what you can and can't do, talk to a Florida bankruptcy lawyer who will give you straight answers and sound advice.

At the law firm of Buddy D. Ford, P.A., we work with businesses and individuals across Florida to help them obtain the debt relief they need to get a fresh start and move on with their lives. We will take the time to answer all your questions and work to dispel the bankruptcy myths that have been keeping you from seeking the debt relief you need.

Common Bankruptcy Myths

Myth: Only irresponsible people and deadbeats file for bankruptcy.
This misconception could not be further from the truth, as many individuals and families that file for bankruptcy relief are hardworking people who have fallen upon hard times. The uncertain economy has caused thousands of Americans to be laid off and left them unable to make ends meet, and they fall into debt while trying to simply provide for their families' needs. Other individuals incur debt after a medical emergency or serious accident that results in high medical costs and missed wages.

Myth: You don't qualify for bankruptcy. While there are certain criteria that determine your eligibility for certain types of bankruptcy, nearly everyone is eligible under at least one chapter. We will evaluate your case and explain the options.

Myth: Individuals can't file for Chapter 11. Many people mistakenly believe that Chapter 11 reorganization is reserved for businesses. This is not true. It gives individuals an opportunity to get control of many types of debt not typically addressed in other chapters.

Myth: Tax debt can't be discharged. Some taxes may be eligible for discharge if they meet the right criteria. Some taxes can be discharged if they were incurred more than three years prior to the filing.

Myth: Interest will continue to accrue on debt. Just like collection activity, all service fees, late fees, interest and other charges stop as soon as your bankruptcy petition is filed.

Myth: You will never be able to get credit again. In fact, you may begin seeing offers for credit shortly after you receive your discharge. Otherwise, you should be eligible for regular lending after two years.

Myth: After bankruptcy, I will be released from all of my debts.
Although many types of unsecured debts can be discharged after the bankruptcy process is complete, it is important to understand that not all debts can be eliminated through bankruptcy. For instance, bankruptcy will not release you from educational loans, child support payments, spousal support payments and most types of unpaid taxes.

Myth: My family, friends and co-workers will all know that I filed for bankruptcy.
Although it is true that bankruptcy filings are public records, very little attention is paid to who files, as hundreds of petitions can be filed in a single month. This means that unless you are a public figure, people will most likely only know that you filed for bankruptcy if you tell them yourself.

Myth: If I file for bankruptcy, I will lose everything I own.
This myth comes from a common misunderstanding of Chapter 7 bankruptcy, in which certain nonexempt assets are liquidated to repay creditors. While you could lose certain assets by filing for Chapter 7, in many cases, filers are able to retain all their properties during the bankruptcy process. If you don't want to risk any of your assets, Chapter 13 could be a great option, as it does not use liquidation; instead, you make one monthly payment to repay your debts over a three- to five-year period.

Myth: Both spouses have to file for bankruptcy.
The law allows for married couples to file jointly, but it is not a requirement. In many cases, only one spouse has debt, and there is no reason for the couple to file jointly. If the spouses' debts are more evenly shared, then jointly filing for bankruptcy may be the right option.

Myth: I can spend as much as I want before filing and I won't have to pay it back.
This myth is very common, and unfortunately, spending recklessly before filing can have disastrous consequences. After filing your petition, a court-appointed bankruptcy trustee will examine your financial transactions and spending for the few months prior to your submitting a petition. If the trustee finds that you spent a great deal of money on luxury services and items before filing for debt relief, the court will likely perceive these actions as fraud and require you to make complete repayment on all of the purchases.

Call For A Free Consultation

Contact our office today to get your bankruptcy questions answered. We are available during regular business hours and by appointment evenings and weekends. You can reach us by phone at 813-302-1258, toll free at 866-596-9247or via email.