Myth 1: You will lose everything you own
FALSE: Atlanta bankruptcy attorneys fight for you to keep your property by placing an automatic stay when you file. This prevents the creditors from collecting your property during the process. Most cases that are filed by individuals are “no asset” cases, which means the debtor or debtors are able to keep their property. This is because the Atlanta bankruptcy law allows individuals to keep a certain amount of property to rebuild with. Although the automatic stay will protect your belongings from being collected, your total debt may not be completely erased. In the event that you cannot afford to pay for your things, your assets may become liquidated to pay the creditor.
There are laws that allow you to keep your belongings, however, they do vary from state to state and there are stipulations that influence what property can go up for collection.
For questions, see our Bankruptcy Exemptions page for more details about what property may be exempt during the debt elimination process.
Myth 2: You will never be able to own property again
FALSE: People who apply for bankruptcy in Atlanta often assume that they will not be able to get credit or loans after they file however the truth is that many banks now offer credit on a secured basis for individuals who may be consider a high risk consumer. Secured basis is when the lender requires an individual to put down a small amount in order to secure payments in the future.
The most important thing to model when receiving a secured basis credit card is financial stability. If you can show the creditor that you are capable of making consistent payments on time then you will be more likely to gain a higher line of credit quickly. This also helps you to purchase a home in the future as mortgage companies do offer loans to people within as little as two years after bankruptcy based off payment consistency history.
Myth 3: Bankruptcy will ruin my credit
FALSE. Bankruptcy actually assists in protecting your credit by removing your debt and delinquent payment history. After the filing process, you will begin to repair your credit right away. This is the time for you to change your habits so that you can show future creditors and lenders that you are responsible and that you are financial stable. This will help make you a better candidate for credit in the future. Although bankruptcy stays on your credit history for up to ten years, you can began to restore your credit and rebuild right away.
Myth 4: Creditors will continue to harass me
FALSE: The purpose of bankruptcy is to stop the efforts of creditors who are attempting to collect from a debtor. Once you have filed for bankruptcy, creditors are prevented from collecting on previous debt and must adhere to an outlined plan put together during the filing process.
Federal Bankruptcy laws prohibit the creditor from attempting to collect, possess and even contact the debtor once a filing has been made. If these laws are breached, the creditor can face punitive charges.
Myth 5: Everyone will know I filed for bankruptcy
FALSE: While bankruptcy is public record, most debtors find that no one knows unless specifically told by them. Only individuals who hold highly regarded positions would be at risk for others to find out they filed for bankruptcy in Atlanta. Creditors, by law, cannot release this classified information to other companies.
Myth 6: I can only file for bankruptcy once
FALSE: Bankruptcy laws will not prohibit you from filing more than once. There is not a limit to the amount of times that you may file however, you are only eligible for a particular amount of debt discharges within a particular amount of time.
Chapter 7 bankruptcy discharges can be received once in every 8 years while Chapter 13 discharges can be received every 2 years. Once you receive a discharge notice and your case is dismissed, you can file again if needed.
Myth 7: My family will be affected if I file bankruptcy
FALSE: Financial trouble is one of the biggest stressors in a relationship. A family who decides to voluntarily file for bankruptcy is ready to take control of their finances again, which gives them a feeling of empowerment. Filing also allows the family to take control over their debt and take steps to return to a financially secure future.
Myth 8: I will have no say in the bankruptcy process
FALSE: As a debtor, you know what companies you owe and the amount that you owe them. While filing for bankruptcy can eliminate your debt, it is not necessary to manage all of your arrears in the filing claim. There are also some debt that cannot be included in your claim, such as past due child support, back taxes and student loans. If you are seeking more information regarding the Atlanta bankruptcy law, contact one of our knowledgeable lawyers today.
Myth 9: If I file for bankruptcy, my spouse will have to file too
FALSE: Married couples have the option of filing together or separately. Often times, filing together is the better option, especially if the debt is accrued on a joint credit line. While you may have accumulated the debt together, it is not required that you file jointly.
Myth 10: Filing for bankruptcy makes me a bad citizen
FALSE: There are many reasons why people end up filing for bankruptcy, none of which makes them a bad citizen. Whether a loss of a job or a change in your family situation, things happen. Often times, the people who file for bankruptcy are honest, hardworking people who struggle to sustain their everyday life and fall victim to financial instability. Bankruptcy is just an option to help good people who are trying to help themselves.