Misinformation And Truths

Filing Chapter 7 Bankruptcy

• Misinformation: I will lose all of my property if I file Chapter 7 bankruptcy.
• The truth: Certain property is “exempt,” meaning that you get to keep it when you file bankruptcy. Exempt property includes all equity in your home, pension plan and 401(k) accounts, up $1,000 of equity in your car, and up to $1,000 in personal property. Any person residing in the U.S. or who owns real estate in the U.S. and who files the required tax returns for the past four years is eligible to file for bankruptcy.
• The truth: If you do not own a home in Florida, you receive an additional $400 in personal property exemptions.

Filing Chapter 13 Bankruptcy

• Misinformation: If I file Chapter 13 bankruptcy, I’ll have to pay back all of my debts.
• The truth: The amount of debt that you pay back will depend on your income and assets. Many people who file Chapter 13 bankruptcy only pay back a small percentage of unsecured debts such as credit card bills.

Who Can File Chapter 7 And Chapter 13 Bankruptcy

• Misinformation: Most people can’t file for bankruptcy under the new laws.
• The truth: You can file bankruptcy if you are a U.S. citizen, own real estate in the U.S., and file taxes.

Is Debt Negotiation An Alternative To Bankruptcy?

• Misinformation: You need a lawyer or a credit counseling firm to negotiate with your creditors.
• The truth: You can negotiate with creditors yourself. However, we recommend an initial consultation with an attorney so you understand the pros and cons of your options.

How Do I Improve My Credit After Filing Bankruptcy?

• Misinformation: Filing bankruptcy will ruin your credit score forever.
• The truth: A bankruptcy will stay on your credit report for seven to 10 years. However, your credit may begin to improve within several months if you pay your other bills on a timely basis. Car payments, student loans, mortgages, etc., can help your credit score rise.

Removing Unsecured Second Mortgages Through Bankruptcy

• Misinformation: All home mortgages are secured loans.
• The truth: Liens can be stripped from mortgages (and they can become unsecured) if the underlying property has an appraised value that is less than the first mortgage.

What Can I Do When The Creditors Keep Calling?

• Misinformation: Creditors have a right to call you any time of the day or night if you owe them money.
• The truth: Creditors cannot call repeatedly to annoy or harass you. For more information, see the Fair Credit Collections Practices Act.

How Can I Save My Property?

• Misinformation: My car cannot be taken from me as long as it is paid for.
• The truth: Only $1,000 in equity in motor vehicles is protected in Florida. If you have a $20,000 car that is paid for, a creditor can sue you, get a judgment, and may garnish it and sell it to offset the debt that you owe that creditor. You would only be entitled to $1,000 from the proceeds.

How Can I Save My Home?

• Misinformation: My house payments will go down if I file Chapter 13 bankruptcy.
• The truth: Filing Chapter 13 bankruptcy has many advantages for homeowners who are facing foreclosure. However, you shouldn’t expect your payments to go down. They are more likely to go up once you add trustee and attorney fees.

Have More Questions About Bankruptcy? Call 352-200-2382 Today.

Call The Day Law Office, in Spring Hill, Florida, in the heart of Hernando County along Florida Central Gulf Coast. Schedule an opportunity to discuss getting the fresh start you need and deserve in a free initial consultation.