BANKRUPTCY Information Central
5020 Monument Avenue, Richmond, VA 23230
Broad Street Bankruptcy Clinic
5020 Monument Avenue
Richmond, VA 23230
804-355-3303 * 804-355-5719
BANKRUPTCY MYTHS. BE CAREFUL.
There are many myths about bankruptcy floating around the internet, through friends, associates and other sources that could result in serious problems if you take action based upon wrong information. Our Virginia bankruptcy lawyers can give you accurate, up-to-date information about bankruptcy, the risks and benefits, and how your unique financial situation will be impacted if you file. Here are some of the common myths that we have run into over our years in practice:
MYTH: Buy everything you can on credit cards before you file. This is not true; any luxury items or large loans within 90 days will not be allowed in your bankruptcy. These are usually considered fraudulent expenditures and will not be allowed to be discharged in the bankruptcy.
MYTH: All of your debts will be discharged in bankruptcy. Some people have been told that through bankruptcy, they will not owe any back payments on a home, car or other item. Actually, if you hope to keep these personal assets, you will be required to continue to pay for them. If your car has been repossessed, you may be able to get it back if the correct arrangements are made regarding payments and insurance coverage. There are opportunities to renegotiate loans and interest rates during the period of a "stay" of collection actions against you. Some debts are non dischargeable. You need to know which debts can and cannot be discharged in filing Chapter 7.
MYTH: You can file bankruptcy whenever you need to. If you have filed Chapter 7 within the past 8 years, you will not be eligible to file again until 8 years have passed. There are also limits between filings of Chapter 13. Many available alternatives exist to assist you if you are in a difficult financial situation and need to get it resolved. We know the ins and outs of alternative or creative filings; we can help.
MYTH: Only irresponsible people file for bankruptcy. Since 1996, and after assisting hundreds of people, we can definitely say that this is not true. The situation that led to bankruptcy is often a personal problem, such as a divorce, medical problem that led to expensive treatments, loss of a job or reduced hours and paycheck. We find that our clients have just run into unexpected and difficult financial problems that have impacted their ability to pay their bills. They are honest, hardworking and responsible people.
MYTH: Taxes can't be discharged in bankruptcy. Actually there are some kinds of tax debts that can be completely forgiven.