Bankruptcy Myths Busted

The average American knows very little about bankruptcy. Most people probably are aware of bankruptcy's ability to dissolve debt and give the debtor a fresh start. Some of the information you might have heard is correct, but some is not. The purpose of this article is to dispel some of the most common bankruptcy myths.

1. Even if I file for bankruptcy creditors will still harass me and my family.

This is absolutely false. Bankruptcy law provides for an automatic stay. Simply, as soon as you file for bankruptcy a hold is put on all your outstanding debts and any creditor attempts to collect those debts. The law prohibits a debtor to attempt to collect, possess, or even contact the debtor in regard to the debt. If a creditor does not follow the rules, the debtor may have an action in the form of punitive damages. Basically, punitive damages are meant to punish a creditor for not following the procedures set out in the bankruptcy code. Whether a debtor has a cause of action against a creditor should be left to an attorney to answer. However what you need to know is this; once you file for bankruptcy, creditors must leave you alone or suffer the consequences.

2. If I file for bankruptcy it may cause more family troubles than I already have, maybe even divorce.

This is also false. There are two ways a debtor can file for bankruptcy voluntary and involuntary. Voluntary filing is done by the debtor. The debtor talks to an attorney or files a petition pro se and gets the bankruptcy process started. In an involuntary bankruptcy, the creditor forces the debtor into bankruptcy often times unwanted by the debtor. Voluntary filing is the result of a family discussing their options with each other and possibly an attorney and making an informed decision on the merits. Divorce is often associated with a bankruptcy with the latter filing. Voluntarily filing for bankruptcy gives the debtor a chance to set his terms and allows the debtor a free choice for the bankruptcy.

3. If I file for bankruptcy the trustee will seize all of my assets and sell them to settle my debts with creditors.

Again this is false. While it is one of the duties of a trustee to sell assets in the estate, the trustee cannot necessarily reach all of your assets. There are many factors that must be examined before this happens. The type of bankruptcy as a lot to do with how much the trustee can seize. For example, a chapter 13 is a reorganization bankruptcy. Simply, the debtor keeps the majority if not all of his assets, and forms a repayment plan to satisfy interested creditors. Even in a chapter 7 filing the debtor gets to keep many assets. These are called non-exempt assets. The debtor's house, car, clothing, furniture, life insurance, etc. are all non-exempt assets. These are just a few of the main assets. An attorney will be able to arm you with the information you need to keep even more personal property a debtor thought possible.

4. If I file for bankruptcy now, I will never be able to file again.

Surprise, this too is false. Filing for bankruptcy does not make you ineligible to file again. Without going into too much detail, just know the bankruptcy code allows a debtor to file for bankruptcy more than once. There are a few things different most importantly possibility of discharge, however you can file for bankruptcy again if you already have filed.

5. If I file for bankruptcy I will never get credit again.

This is simply false. If this were true then nobody would file for bankruptcy. Americans depend on credit and this is no different than a debtor who has filed for bankruptcy. Several banks now offer credit on a secured basis to potentially risky customers. The debtor would put up a small amount of money so as to secure payment in the future. Once the debtor proves his ability to pay, credit limits get higher. As little as two years after a chapter 7, a debtor is eligible for mortgage loans on terms equal to someone who has not gone through bankruptcy. Creditors look more to a debtors stability, as opposed to the fact you filed for bankruptcy.

Read more about bankruptcy at www.bankruptcyhome.com

Original content from http://www.bankruptcyhome.com can contact at siteadmin@bankruptcyhome.com

Boston Globe
Former Credit Suisse broker arrested in US
Swissinfo, Switzerland - 11 hours ago
A former Credit Suisse broker has been arrested for fraud and conspiracy over deceptive sales of subprime-related auction-rate debt in the United States. ...
Former Credit Suisse broker charged with subprime-linked fraud in ... International Herald Tribune
UPDATE 1-FBI arrests ex-Credit Suisse broker Reuters
Bulgarian Wall Street broker indicted Sofia Echo
Independent - Washington Postall 472 news articles

S&P cuts O'Charley's credit ratings
CNNMoney.com - 4 hours ago
S&P on Thursday cut the company's corporate credit rating to "B+" from "BB-" and its senior secured credit facility rating to "BB" from "BB+. ...
Cut north-west or bust The Canberra Times
Upstate NY water authority rated AA Newsday
all 139 news articles

CEP News
S&P upgrades Raytheon credit ratings 1 notch
CNNMoney.com - 22 hours ago
S&P upgraded the company's long-term corporate credit rating to "A-" from "BBB+." The outlook is "Stable." The Waltham, Mass. ...
Credit rating soars in District 300 Northwest Herald
Starbucks downgraded to 'BBB' on weakening credit metrics - S&P Hemscott
Standard & Poor’s reviews Fifth Third, Regions, Synovus, Colonial Milwaukee Business Journal
Wall Street Journal - The Plain Dealer - cleveland.comall 91 news articles

The Upcoming Technology of RFID For Contactless Access Control ...
MarketWatch - 4 hours ago
This technology is now being rolled out in the UK and around the World for so called 'BioMetric passports' and credit cards because there are no physical ...

Credit Crunch: The Sequel
U.S. News & World Report, DC - Sep 4, 2008
And that certainly seemed to be the case in March when investment bank Bear Stearns became the highest-profile victim of the credit crisis. ...
UPDATE 1-US banks' direct borrowing hits record in week Reuters
UPDATE:Comml Bks Set Record For Avg Discount Window Borrowing FXstreet.com The Foreign Exchange Market
Banks borrow more from Fed; Wall Street takes pass The Associated Press
San Jose Mercury News - Reutersall 77 news articles

Legg Mason's stock hit by Credit Suisse downgrade
Reuters - 22 hours ago
Credit Suisse analyst Craig Siegenthaler downgraded Legg Mason, the No. 2 publicly traded US asset management company, to "underperform" from "neutral," ...
After Credit Suisse downgrade, Legg shares fall Daily Record (subscription)
Legg Mason leads financials lower MarketWatch
Legg Mason shares slide after ratings downgrade Forbes
Baltimore Sun - 24/7 Wall St.all 21 news articles

Credit Suisse appoints India investment banking MD
Hindu Business Line, India - 3 hours ago
MUMBAI: Credit Suisse on Friday announced the appointment of Mr Pankaj Kalra as the Managing Director of its India investment banking department. ...
Credit Suisse hires Merrill banker in India Reuters
Credit Suisse appoints Pankaj Kalra, MD, investment banking domain-B
Merrill Lynch Hires Dick Barrett and Mark Ellman to Strengthen ... MarketWatch
Markets Media (press release) - TheStreet.comall 24 news articles

Minyanville.com
As the Credit Strains Linger, Pimco’s Gross Calls for Intervention
New York Times Blogs, NY - 5 hours ago
Banks and businesses are still having trouble raising money, according to data on Thursday that reinforced the prospect that the year-long US credit crisis ...
Freaky Friday Potpourri: Help Wanted in Washington! Minyanville.com
Pimco's Bill Gross hits the panic button BloggingStocks
'Financial Tsunami' To Engulf Markets, Says Pimco's Gross Evening Bulletin
Bloombergall 35 news articles

UPDATE 2-Lehman credit spreads widen amid KDB speculation
Reuters - 1 hour ago
Lehman's credit default swaps rose 20 basis points to 345 basis points, or $345000 per year for five years to insure $10 million in debt, from 325 basis ...
Credit crunch: Small Korean bank in $6bn bid to rescue Lehman guardian.co.uk
Southpaw: Blood now, pay later: banks get ready for bonus season Euro Week
Lehman nears rescue deal with KDB Financial Post
MarketWatch - MarketWatchall 893 news articles

Yahoo
MOVES-Unicredit, Pacific investment, Credit Suisse
Reuters - 6 hours ago
Sept 5 (Reuters) - The following financial services industry appointments were announced on Friday. To inform us of other job changes, please e-mail ...
In praise of… Pimco FT Alphaville
all 50 news articles

Wind Chimes and more...

Windchimes for great gifts!

10 Signs You May Need Credit Counseling