If you are struggling to pay off debt and make ends meet, bankruptcy can provide you with protection from creditors and give you a fresh start. Still, many people are afraid to file because of myths, half-truths, and misinformation.
If you are considering filing for bankruptcy, please read through the information about bankruptcy myths and contact the bankruptcy attorneys at Fesenmyer Cousino Weinzimmer for more information and representation. Call 614-228-4435 for Columbus, 937-222-7472 for Dayton, and 877-654-5297 for Cincinnati.
Myth 1 – Bankruptcy will ruin my credit.
While bankruptcy can remain on your record for up to 10 years, there are steps you can take to rebuild your credit as soon as your bankruptcy is discharged. Bankruptcy wipes out debt that may be negatively reporting, which helps your FICO credit score increase. After bankruptcy, you may actually be in a better position to get credit because it reduces your debt-to-income ratio in many cases.
Also, because you won’t be able to file Chapter 7 again for another eight years, you may appear to be a better risk. Be aware that many companies will give you credit, but interest rates will likely be higher for the first few years. You can build your credit and lower interest rates by making timely payments on secured debts for property that you choose to keep.
Myth 2 – I will lose everything in bankruptcy.
People who file for bankruptcy can often keep their home, cars, and other personal property. Ohio has some of the >best exemptions in the country that allow you to keep property, up to certain limits, including but not limited to:
- Homestead – your home, farm, or trailer
- Household goods
- Motor vehicle
- Jewelry
- Insurance benefits, such as health or disability benefits
- Pensions and retirement plans
- Alimony and child support
- Public benefits, such as aid to the blind or veterans benefits
Additionally, Ohio allows those who file for Chapter 7 bankruptcy to keep some cash on hand.
Myth 3 — Bankruptcy will wipe out all my debt.
What happens to your debt depends on your individual circumstances and the chapter of the bankruptcy code under which you file. Chapter 7 bankruptcy mainly focuses on providing relief from your unsecured creditors, while Chapter 13 bankruptcy will repay some of your obligations through a repayment plan. Additionally, some debts cannot be discharged in either Chapter 7 or Chapter 13 bankruptcy.
Fesenmyer Cousino Weinzimmer always fights for the most optimal results for its bankruptcy clients.
Myth 4 – Everyone will know that I filed bankruptcy.
Unless you decide to tell people, only creditors to whom you owe money or who pull your credit report when you apply for credit will receive notice of your case from the bankruptcy court. Even though bankruptcy proceedings are public information, and anyone can gain access to them, it’s unlikely anyone will. Few regular newspapers publish bankruptcy filings, so non-creditors must research your name through court records or legal periodicals to find this information, and most people will not bother to go to the trouble.
Myth 5 – You can pick what debts to include in your bankruptcy.
No, if you file for bankruptcy, you have to list all of the debts that you owe and the property that you own. You cannot choose and discriminate between creditors, but there are options. If there are some debts you would like to keep paying, you can continue to make payments on those accounts voluntarily or enter into a reaffirmation agreement allowing that debt to survive bankruptcy.
Myth 6 – If you file bankruptcy, your spouse will have to as well.
While married couples often file bankruptcy jointly, this is not necessary. Depending on your circumstances, you can file together or separately. In many cases, it makes sense for the husband and wife to file together, but in some instances, the spouse might not want to file. For example, sometimes one spouse has all the debt, or one spouse wants to keep property that’s in his or her name only, so it’s preferable to have the other spouse file individually.
Frequently Asked Questions
Top Questions Answered
The following are questions our bankruptcy attorneys regularly receive. Please read through them and reach out to our office for more information.
Can I spend recklessly right before filing for bankruptcy and not have to pay the money back?
As many know, Chapter 7 bankruptcy typically leads to credit card debt being wiped out. So some petitioners believe that they can rack up however much they want in credit card charges before filing and have those charges go away during bankruptcy proceedings.
Unfortunately for these petitioners, the bankruptcy court does not allow this practice to occur. The courts heavily scrutinize your debt and will quickly recognize most schemes of this nature, which are considered fraud. Fraudulently acquired debt is not dischargeable in bankruptcy.
Am I a failure if I file for bankruptcy?
Bankruptcy is a legal tool used by businesses and individuals alike to deal with temporary financial problems. Even the most successful people in the country file for bankruptcy and continue on with successful careers, including Curtis Jackson “50 Cent,” Michael Jackson, and Willie Nelson.
How much does a bankruptcy attorney cost?
Attorney’s fees vary depending on the case. Our bankruptcy attorneys offer a free consultation where they will go over your entire financial situation and give you an exact fee quote.
How long does a bankruptcy take?
Chapter 7 can take anywhere from three to six months. Chapter 13, on the other hand, can take from three to five years.
More questions? Feel free to call Fesenmyer Cousino Weinzimmer for answers.
Get Help and Guidance from an Experienced Bankruptcy Attorney
Don’t Go It Alone
Remember, bankruptcy issues may be complicated, but the experienced Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand the issues and the difficult decisions involved in taking this step and starting to rebuild your credit. We will work with you to make sure you understand your options and help you decide on solutions that make sense in your individual case.
Call Fesenmyer Cousino Weinzimmer at one of our office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) for a free consultation so we can determine what debt relief solutions will work best for you.
