Bankruptcy Myths

Chicago Area Bankruptcy Attorneys

Unfortunately, many people struggle unnecessarily with unmanageable debt because they have fears and concerns about bankruptcy. While bankruptcy is not the right solution for all debt problems, it has allowed millions of people to break free from unmanageable debt and obtain critical relief.

The U.S. Bankruptcy Code is designed to help people who are struggling financially to obtain a fresh start. If you are unable to manage your debts due to a job layoff, large medical bills, large credit card debts or other difficult financial challenges, learn more about bankruptcy by contacting Edwin L Feld & Associates. We have helped thousands of clients find solutions to their financial problem with a Chapter 7 or Chapter 13 bankruptcy.

Common Bankruptcy Myths

Due to changes to the U.S. Bankruptcy Code in 2005, many people have questions about their eligibility for bankruptcy and do not fully understand which types of debts may be discharged. Other common misunderstandings about bankruptcy include concerns about its impact on credit and concerns about the liquidation of property.

We have provided below information about common bankruptcy myths and the truth about bankruptcy. To learn more, contact our firm today to schedule a free consultation with an experienced bankruptcy lawyer at our firm.

Myth: New bankruptcy laws make it very difficult to qualify for bankruptcy.

Truth: Due to changes to bankruptcy laws, people's family income must be within a certain range to qualify for Chapter 7 bankruptcy. However, a very large percentage of people who contact our office are eligible for Chapter 7 bankruptcy, and those who do not qualify for Chapter 7 will likely be eligible for debt relief through a Chapter 13 bankruptcy. In most cases, the real question is which type of bankruptcy is best suited to meet a client's needs.

Myth: You may not discharge credit card debt through bankruptcy.

Truth: You can discharge credit card debts, medical bills and most other forms of consumer debts with a Chapter 7 bankruptcy. You can also discharge debts upon completion of your Chapter 13 debt repayment plan.

Myth: You will lose all of your property if you file bankruptcy.

Truth: Property is not liquidated with Chapter 13 bankruptcy. Many of our clients who file for Chapter 7 bankruptcy keep all or a significant portion of their property. For people who might lose vital assets in a Chapter 7 bankruptcy, a Chapter 13 bankruptcy may be an alternative option that will allow them to obtain debt relief.

Myth: You may not strip a second mortgage through bankruptcy.

Truth: You may strip a second mortgage lien with a Chapter 13 bankruptcy if the value of your home is less than the amount you owe on your first loan.

Myth: Filing bankruptcy will permanently destroy my credit. I will never be able to obtain a car loan, get a credit card or qualify for a home loan in the future if I file for bankruptcy.

Truth: By the time people file for bankruptcy, they typically have been making late payments on debts for months or possibly years. In addition, people who are filing for bankruptcy usually are in a position where they will not be able to make timely payment of their debts for a considerable period of time. Unfortunately, people who are considering bankruptcy often have a poor credit rating as a result. Continuing to make late payments for an extended period of time may only delay the process of rebuilding your credit. While filing bankruptcy may have a negative impact on your credit rating in the short run, it may also enable you to manage your debts effectively and begin the process of rebuilding your credit.

Contact Our Chicago Bankruptcy Lawyers

We offer 7 office locations to provide local representation to clients throughout the Greater Chicagoland area and surrounding suburbs. To schedule a free consultation with an experienced bankruptcy lawyer at our firm, contact us toll free at 888-645-4357. You may also contact us by e-mail.