I know that most of my clients use the Internet to learn about bankruptcy way before contacting me. This is good in that it gives them a solid leg up on the subject before we meet, but it is also bad because there is a lot of misinformation out there.
I have written before about not letting bankruptcy myths deter you from getting a fresh start, but I ran across something this morning that prompted me to revisit this subject.
Salesmen Don't Know About Bankruptcy
Someone I follow on Twitter tweeted about a blog post entitled “7 Scary Facts You May Not Know About Filing Bankruptcy.” Geez! After reading the post, written by someone who states he has been in sales, marketing and management for over 27 years (i.e. not a lawyer or bankruptcy professional), I just had to respond lest people get the wrong idea on bankruptcy.
According to the blogger, these scary facts are as follows. Let’s break it down and find out why none of this is scary.
- If you are paying a home mortgage and want to keep your house, you will still have to make payments. Well, of course! If you don’t make your mortgage payments, the bank will foreclose. Bankruptcy certainly doesn’t change that! However, if you are behind on your mortgage payment, chapter 13 could help you get caught up and save your house!
- You can surrender your house allowing the mortgage holder to take it back thus eliminating the payment. However, you will no longer have your home and have to find another place to live. Again, this is just common sense and has nothing to do with bankruptcy. But filing can discharge the mortgage obligation and allow you to move out with a fresh start.
- If you have an automobile and want to keep it, a portion of the balance due the lender is added into your plan payment. Geez, more common sense! Make your car payment or the bank will repossess it. Also, if you are in a chapter 7, there is no plan payment; just pay the bank every month for the car!
- You probably will not be able to keep such luxuries as boats and other recreational vehicles if the court feels they are an asset that you could turn into cash to pay down your other debts. How many of you out there have boats and RVs? Thought so. Most people’s assets are protected by exemptions, but there are a small percentage of cases where assets are lost. Don’t assume you will lose anything without talking to a bankruptcy lawyer.
- If you owe the IRS, rest assured they will get their cut. Only if your IRS debt has passed the statute of limitations does if evaporate. Wrong! The dischargeability of tax debt is involved and not as straightforward as a “statute of limitations.” Many times, you can discharge taxes.
- This one you can usually consider non-secured debt and it will be considered non-collectible. So bankruptcy can wipe out credit card debt; that’s a good thing!
- Filing bankruptcy will cost you. All attorney fees, court fees, filing fees, calculated debt loss to creditors everything is added into your plan payment. Yes, attorney’s charge fees, and there are court costs involved in filing bankruptcy. But in most cases those amounts are less than 10% of your overall unsecured debt. Sounds like a good deal to me!
Wow! This is some incredibly misinformed stuff! The bottom line: don’t listen to the sales and marketing guy; listen to the bankruptcy professional. He or she knows what bankruptcy is and what it isn’t.
I Can Help Get You the Right Information
If you live in southern New Jersey and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey. It's much better that believing everything you read on the Internet!