Fact or Fiction: Dispelling Bankruptcy Misconceptions
Often, individuals facing overwhelming debt fear that filing for bankruptcy may hurt their financial standing more than it will help.
As Rochester, New York, bankruptcy attorney with more than three decades of experience helping residents of New York eliminate their debt through bankruptcy, I want to share my knowledge with you and assist you with making the best debt relief decision for your specific financial situation.
When my clients come to me with questions about their financial struggles, the most common concerns I hear are:
I will lose my house. Filing for bankruptcy, whether it be Chapter 7 or 13 bankruptcy, can temporarily stop foreclosure proceedings on your home through a court-ordered automatic stay. The automatic stay actually stops all creditor collection activity, as well as any liens or garnishments of your wages. This can allow you a period of time to find other resources in order to make mortgage payments. Specifically, during a Chapter 13 bankruptcy, your finances are reorganized into a three- to five-year repayment plan to make paying back your loans more manageable — ultimately helping you keep your home.
I will lose all my other property. Similar to the answer above, as soon as you file for bankruptcy, an automatic stay will be put in place that temporarily stops creditors from collecting on your debt, which puts an end to repossessions, liens, garnishments and other collection activities. This allows you a period of time to find other resource to make payments on your loans. A Chapter 13 reorganization bankruptcy will reorganize your debt into a manageable plan that will help you pay back you loans in a three- to five-year time span.
I will not be able to buy another house. This myth stems from the idea that you will never be able to obtain good credit again after you file for bankruptcy. This is not true. The key to building up your credit involves being cautious about the new loans you apply for. As long as you are diligent about making the appropriate payments on time, you can work toward repairing your bad credit. It may take a little while after your bankruptcy has concluded, but soon enough you'll be able to apply for a loan for that new home you want.
I will not be able to get a credit card again. The same goes for credit cards as it does buying another house after bankruptcy. Yes, you will be able to obtain new credit cards after your bankruptcy, as long as you start off slowly. It is vital to make payments on time, every time in order to rebuild your credit.
If you have other questions about how bankruptcy will specifically affect you, please don't hesitate to call my office and set up a free initial bankruptcy consultation.
Contact Robert A. Schwartz Today
Do you have questions about how filing for bankruptcy will affect you? Contact Rochester Chapter 7 and 13 bankruptcy attorney Robert A. Schwartz today at (585) 351-2929, or contact him online. The law office of New York lawyer Robert A. Schwartz, located in Rochester, New York, offers free initial bankruptcy consultations. Business hours are 9 a.m. to 5 p.m. Monday through Friday.