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Facts & Myths of Bankruptcy

On Behalf of | Dec 13, 2019 | Firm News

Facts & Myths of Bankruptcy

Experienced Fort Lauderdale Bankruptcy Attorney Providing Straight Information

Individuals who work hard to support their families are often under the mistaken belief that they will lose all their assets, as well as their reputation, if they file bankruptcy. Unfortunately, these and other myths can prevent people from getting the debt relief they need.At the Law Offices of Michael H. Johnson, we separate the facts and myths surrounding bankruptcy. Whether you went into debt due to unemployment, bad real estate investments, divorce or another reason, our goal is to provide straightforward information about debt relief.

Common Misconceptions Dispelled

There is a great deal of misinformation circulating about bankruptcy, including:

  • You will lose your house if you file bankruptcy – The truth is, as long as you can afford your mortgage payment, you may keep your house if you file either Chapter 7 or Chapter 13 bankruptcy.

  • Bankruptcy will cause you to lose your car – Under Florida Law, your vehicle can be protected by certain bankruptcy exemptions.

  • You will lose all your personal belongings – Actually, certain bankruptcy exemptions under Florida law allows people to retain a certain amount of personal property, including clothing and furniture.

  • Your 401(k) account will be liquidated to pay your debts – All qualified retirement accounts are fully protected by bankruptcy exemptions under Florida law.

  • Bankruptcy will ruin your reputation – While bankruptcy is public record, generally, only your creditors and the people you tell will know you filed.

  • If you file for bankruptcy, you’ll never get credit again – Most people filing bankruptcy already have taken a hit on their credit score. Bankruptcy eliminates all or a portion of your debt, putting you in a position to rebuild your credit score and create a stronger credit history.

  • If you’re married, both spouses need to file – This is not true. If all of the debt is in one spouse’s name only, then only that spouse is required to file.

  • Bankruptcy does not wipe out past due taxes – Some back taxes are eliminated in bankruptcy.

  • Bankruptcy wipes out all debt – Some debts, such as child support and alimony, are non-dischargeable in bankruptcy. Other debt such as Student Loans are very difficult to eliminate, however, they may be eliminated.

  • Creditors can still harass you after you file bankruptcy – Once you file, all creditor collection actions must stop if the actions do not cease, the creditors may be held liable for their actions.

  • Bankruptcy affects your taxes – There are no tax implications in bankruptcy.

Don’t Rely on What You’ve Heard. Get the Truth.

Don’t make the mistake of relying on inaccurate information on issues such as auto repossession, foreclosure and credit card debt. To get the straight story about bankruptcy, contact us online or call us at 954-535-1131 and schedule a free initial consultation with an experienced lawyer.

Our firm maintains offices in Fort Lauderdale and West Palm Beach. We offer evening, weekend and off-site appointments. Phones are answered 24 hours a day/7 days a week.We accept credit cards. Payment plans are available.