Myth - I won't be able to get credit after filing for Bankruptcy for 10 years

Answer - Although the bankruptcy filing will be listed on your credit report for up to 10 years, it will not prevent you from rebuilding credit. In fact, your credit rating suffers substantially while sustaining debt that you are not paying or paying timely. Generally, immediately after a discharge you will receive credit card offers, which will enable you to begin rebuilding your credit.

Myth - Bankruptcy will eliminate every debt that I owe

Answer -Unfortunately, bankruptcy cannot cure every financial problem. Certain debts are exempt from discharge. Secured creditors such as a mortgage on a house you intend to keep or a vehicle that you intend to keep are non-dischargeable. Student loans except in extremely rare cases, child support, alimony, court restitution orders, criminal fines, most taxes, money borrowed by fraud or false pretenses and debts not listed on your bankruptcy petition are all non-dischargeable.

Myth - I will lose my property if I file bankruptcy

Answer - Generally, most people get to keep all the property they own by using exemptions provided by state or federal law and/or the homestead act. However, if you happen to receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy that money or property may have to be paid to creditors if the property or money is not exempt.

Myth - My spouse must also file bankruptcy

Answer - You may file solely. For instance, if your spouse may have the better credit and you wish to protect it, then you would file individually. But of course if you both need relief from debt, you may file jointly.

Myth - There is a minimum amount of debt required to file bankruptcy

Answer -There is no set limit necessary to file bankruptcy. You must simply be unable to pay your debts with the income that you receive.

Myth - I can't own anything after filing bankruptcy

Answer - You can keep your exempt property after the bankruptcy is filed

Top Reasons To File Bankruptcy

• The stress of bills you can’t pay, collection calls, and worry about garnishment can contribute to health issues.

• Ability to avoid a second mortgage or equity line on a primary residence that is underwater.

• No tax consequence for debt discharged through bankruptcy unlike through debt settlement.

• Generally you can keep all of your real and personal property through state or federal exemptions.

• The Single largest reason is that you cannot move forward. Your credit score will not improve until debts are either paid in full or discharged in Bankruptcy.

• Every dollar spent making a minimum payment is a dollar you are not saving for your retirement. Let’s face it, none of us are getting any younger.

Other reasons why many people who desperately need to file Bankruptcy don’t is because of the myths surrounding Bankruptcy. It’s simple don’t take advice from a friend or associate about Bankrutpcy seek professional advice. You wouldn’t ask a friend how to solve a heart

If you do qualify, the benefits of Chapter 7 affords you the most protection from creditors and allows some of the best ability to start anew.  In a Chapter 7, your debts are simply “discharged” or eliminated by court order.  You don’t have to make plan payments to a trustee.  Debts most commonly discharged includes credit card balances and medical bills.  Generally, debts that are not dischargeable in a Chapter 7 domestic support obligations (i.e. child support and alimony) and student loans. 

Since non-exempt property can be collected and sold to pay off creditors, resulting in a loss of personal property, it is best to equip yourself with experienced counsel with experience in this area.  Attorney Flounory is qualified to provide you the proper guidance and representation to accomplish your goal…elimination of debt while keeping your property.   We will pursue your rights under Federal and Massachusetts Laws aggressively to obtain the best results for your circumstances.

Benefits of Chapter 13
Chapter 13 allows the debtor the ability to stop a mortgage foreclosure, giving the client time to cure a default and in some cases to negotiate lower monthly payments and/or principal due.  Can be used to prevent repossession of a vehicle, discharge tax penalties, eliminate tax liens or reduces liens to the present values of his/her assets, and  impose an interest free repayment plan for recent taxes.  

In addition, if a debtor has non-exempt property it will be protected under chapter 13 as well, though its present value must be paid to unsecured creditors over the course of the plan. Although alimony and child support arrearage or taxes cannot be discharged they may be stretched out over a longer period than would otherwise be possible and perhaps avoid interests and penalities.

High income debtors are frequently urged to file under chapter 13 of the bankruptcy code to avoid a motion to dismiss based upon the “abuse” provisions of section 707(b).