You Need to Know
San Diego Bankruptcy Myths
A married person cannot file individually for Bankruptcy in San Diego.
– If the debt is in your name alone, you can file separately. However, if you are both responsible, you should both file or your creditor will likely continue to pursue payment/collection from your spouse.
You can’t discharge tax obligations in a bankruptcy proceeding.
– While this is typically true, it’s not ALWAYS true. There are instances when you can discharge IRS debts in Bankruptcy.
You will lose all your property in a Chapter 7 bankruptcy.
– The purpose of filing for Bankruptcy is to start FRESH not FROM SCRATCH. This is why Bankruptcy is referred to as “Protection” for Consumers. Most people who file will keep the lion’s share of all their personal property.
Filing for San Diego Bankruptcy will cause your Credit Score to drop.
– Each case will be different of course, but in my experience and case study, 93% of the people who filed for Chapter 7 had higher credit scores just a few months after their case was discharged. These subjects did nothing to their credit to affect it during this period except the Bankruptcy, so we have pretty solid, real-world evidence.
You can’t file Bankruptcy if you have a job.
– The new “means test” is supposed to divert some filers who make more than the median income for households of their size in their state of residence to Chapter 13 versus the simpler Chapter 7. The only way to fund a Chapter 13 Bankruptcy plan is to HAVE a job.
Medical bills cannot be discharged in bankruptcy.
– Almost all unsecured contract debt, like credit cards, personal loans, and medical bills, remain dischargeable in bankruptcy.
Chapter 13 plans require repayment in full of all debt.
– Chapter 13 plans range from plans that pay general unsecured creditors nothing to plans that pay 100%, with every variation calculable in between. How much you must pay in 13 is driven by the interplay between your disposable income, the value of your non-exempt assets, and the total of priority debts you have.
You surrender everything you own when filing for Bankruptcy in San Diego.
– Well over 95% of bankruptcy cases filed by individuals are “no asset” cases in which the debtor keeps everything he owns. That’s because exemptions provide for assets that the debtor can keep and some assets, like pensions, are beyond the reach of bankruptcy trustees and creditors.
Bankruptcy causes everyone else to pay higher interest rates.
– If you think the Banks are deciding what interest rates to charge based on the number of Bankruptcy filings, you’re insane. They will charge as much as they possibly can. Period. Do you really think the banks would lower interest rates if Bankruptcy filings decreased?
Everyone will know I’ve filed for bankruptcy.
– Unless you’re a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it’s true that bankruptcy is a public legal proceeding, the number of people filing is so massive that very few publications have the space, the manpower or the inclination to run all of them.
A bankruptcy filing is a sign of personal failure.
– Most bankruptcies result from unexpected situations, such as medical problems, the loss of your job or divorce. It’s also a sign you want to do something positive to protect you and your family as well as your possessions.
There are so many Myths about San Diego Bankruptcy that I can’t possibly list them all here. You can be sure of one thing… Bankruptcy is the most powerful financial tool that exists and if You’re in a bad spot, there is a good Chance that Bankruptcy could make things good again for You and Your family. Email me below if You need me, I’m happy to help as much as possible.