At the Harrington Law Firm, we are a Debt Relief agency and we do assist people in filing for Bankruptcy under Federal Bankruptcy Law and also counsel people about non-bankruptcy options when they are suffering from financial problems.
There are lots of “street lawyers” out there who are very quick to give “advice” about the process and the effects of filing for bankruptcy.
First of all, the information those “street lawyers” give you is very likely incorrect. It may be that they or someone they knew filed bankruptcy in the past but bankruptcies are like snowflakes, every one is different. No two financial situations are exactly alike and what may or may not have worked for one person may work the total opposite way for another. In any event, here are some of the most common myths that we come across when counseling our clients about the possibility of filing bankruptcy:
MYTH #1:
If you file bankruptcy you will lose everything you have. That is actually almost never the case. In fact, most of the Chapter 13 Debt Consolidation Bankruptcies we file have the opposite effect. They often allow our clients to keep their property instead of losing it to their creditors.
MYTH #2:
You will never get credit again and you will never be able to own anything again. Both of these myths are absolutely false. We find that in the vast majority of our clients, the filing of bankruptcy actually improves their credit, sometimes dramatically, and that after they finish the bankruptcy, if they otherwise qualify for loans, they can purchase vehicles, homes, and as we like to say: “do anything you’re big enough to do.”
MYTH #3:
Filing will hurt your credit for ten years. This is absolutely a myth. While this may have been true many years ago, our experience has been that our clients’ credit improved dramatically upon receiving their discharge and they start receiving credit cards in the mail and offers from companies wanting to provide them with credit. Of course, we caution our clients to be very careful and conservative before getting themselves in debt again.
MYTH #4:
If you are married, both spouses have to file. This is not the case; we have many cases where one of the spouses in a married couple files while the other one does not.
MYTH #5:
You’ll have to testify in court. This is very, very unlikely. During Covid, the Bankruptcy Courts in our area began conducting the debtors’ meetings with the Trustees by telephone conference and/or Zoom and that continues to this day. That means that you can participate by phone from your home, work or wherever you are. It is rare that a court appearance would be required, and most of those are now are conducted by ZOOM.
MYTH #6:
Even if you file, creditors will still harass you and your family. Upon filing either Chapter 7 or Chapter 13, which are the two types of consumer bankruptcies, all of your creditors will be served with what is called the “Automatic Stay,” which is an order issued by the Court prohibiting your creditors from suing you, calling you, writing you, or having any other further contact with you. You will have filed for bankruptcy protection, and protection is what it provides.
MYTH #7:
You can’t get rid of back taxes through bankruptcy. This is not always the case. Although there are some taxes that you cannot discharge through bankruptcy, we are often able to wipe out a good deal of back taxes and even if we can’t, could at least stop the penalties from running and protect our clients from seizures or any other collection efforts by the IRS or the State.
MYTH #8:
Bankruptcy cannot help you get your driver’s license back after suspension for MV fines. Again, this is false. We see many clients who owe thousands in Office of Motor Vehicle (DMV) fines and charges, and who have had their driver’s license suspended. In most cases we are able to file a Chapter 13 Bankruptcy, take care of the fines through the plan, and immediately get the suspension lifted.
MYTH #9:
You can only file once for bankruptcy protection. This is definitely not true; debtors can file multiple times for bankruptcy protection.
MYTH #10:
Only deadbeats or bad people file for bankruptcy. This is definitely a myth. We find that our clients see bankruptcy as an absolute last resort and 90+% of our clients file for one of the following reasons: divorce, excessive medical bills, or becoming unemployed or under-employed.
MYTH #11:
When you get behind on your bills and can’t catch up bankruptcy, is your only option. When a client comes to us for a free consultation at The Harrington Law Firm, we discuss all of their options. Often times we will recommend non-bankruptcy options with our clients, such as, allowing us to negotiate with their creditors.
Remember, your first appointment is always free!
In addition to bankruptcy, The Harrington Law Firm handles Automobile Accidents, Medical Malpractice and other type of Personal Injury cases, Successions, Social Security Disability claims, and uncontested Divorces.
The Harrington Law Firm may be reached by calling (318) 352-5900 or going to http://www.theharringtonlawfirm.com
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