SECRET NO. 1: MOST PEOPLE KEEP ALL OF THEIR PROPERTY
The Bankruptcy Code provides for you to keep your home, cars, furniture, appliances, retirement plans, and other essentials that you need to get a fresh start. Although it is true that there are limits to the values of what you can keep in bankruptcy, those limits are very generous, and most people are not required to give up anything. In general, fears of losing property in bankruptcy are overblown by the credit industry.
SECRET NO. 2: YOU DON’T NEED TO BE BROKE TO FILE FOR BANKRUPTCY
You can be employed, have a bank account, and own property up to certain limits as of the date your bankruptcy case is filed. Once your case is filed, you can acquire any new property you want, and no one – the courts, the trustee, or your creditors – can touch it. Special rules do, however, affect inheritance rights and a limited number of other “windfall” acquisitions, such as winning the lottery, within the six months after your case is filed.
SECRET NO. 3: THERE IS NO MINIMUM AMOUNT OF DEBT REQUIRED FOR BANKRUPTCY
Bankruptcy is designed for people who are unable to repay their existing debts, and there is no requirement that you owe a certain amount before you can declare bankruptcy. The ability to file bankruptcy is based on the amount of your debt compared to your income. Many people file for bankruptcy who owe relatively little money, and many people who owe a great deal of money do not have the need to file for bankruptcy.
SECRET NO. 4: A BANKRUPTCY FILING IS NOT “THE KISS OF DEATH” TO YOUR CREDIT RATING
While we hope you will not go into bankruptcy with the intent of getting back into debt, the negative impact of bankruptcy on credit is extremely exaggerated. After you receive your bankruptcy discharge, it won’t be long before you begin receiving credit card offers again. However, these early offers are usually at very high interest rates, and should be avoided. Once you have put together a savings plan and have started to build your “cash cushion,” you will be able to begin thinking about new credit. If you have kept your home, car, or other collateral and have continued to make prompt payments during and after the bankruptcy, your credit score will gradually improve. After about two years post-bankruptcy, you will be able to obtain reasonable interest rates on mortgage, vehicle, and credit card debt. The bankruptcy case will remain on your credit report for 10 years after the filing date, but will have less and less impact on your credit score as the years go by.
SECRET NO. 5: YOUR BANKRUPTCY CASE WILL NOT BECOME PUBLIC KNOWLEDGE
Bankruptcy filings are not reported in the newspaper or otherwise revealed to the public. While it is true that a bankruptcy case is filed in federal court and is of public record, it is extremely unlikely that anyone you know will go to the courthouse and find out that you have filed a case. You should be aware, however, that if you file a Chapter 13 bankruptcy case, the trustee may require that your payments to the trustee be made through payroll deductions. In that case, the payroll department of your employer would be informed that you are involved in a Chapter 13 bankruptcy case.
SECRET NO. 6: YOUR SPOUSE MAY NOT HAVE TO FILE FOR BANKRUPTCY WITH YOU
It is not uncommon for one spouse to be able to file a bankruptcy case, and allow the other spouse to remain outside the case. Each couple’s situation must be fully evaluated before such a determination is made, but every effort will be made to allow only one spouse to declare bankruptcy.
SECRET NO. 7: YOU ARE NOT ALONE
Every person going through bankruptcy feels alone. Nothing could be further from the truth. Over 1,000,000 Americans filed for bankruptcy in 2008, and the rate continues to climb sharply. You undoubtedly know people who have filed for bankruptcy, although they may not have shared that information with you. The many famous individuals and companies who have filed for bankruptcy include:
President Abraham Lincoln
Author Mark Twain
Automobile Manufacturer Henry Ford
Hall of Fame Quarterback Johnny Unitas
Hollywood Director Francis Ford Coppola
Television Personality Larry King
Actor Mickey Rooney
Actor Burt Reynolds
Actress Kim Bassinger
Entertainer Jerry Lee Lewis
Entertainer Wayne Newton
Entertainer Toni Braxton
US Airways (twice)
There is absolutely no reason to feel guilty about filing bankruptcy, especially if you use it as an opportunity to provide future financial happiness and security for your family. All of these people went bankrupt, yet all of them went on to achieve success in their fields. So remember that while your financial problems are serious, they aren’t the end of the world. Declaring bankruptcy is often the beginning of your new world of financial freedom.
SECRET NO. 8: KRAFT & ASSOCIATES IS HERE TO HELP YOU
Kathleen Munden, the lawyer who manages the Consumer Protection Department at Kraft & Associates, has over 13 years of experience in providing individuals with bankruptcy assistance. We offer a free, no obligation consultation with Ms. Munden, to discuss your individual financial circumstances and develop a plan to solve your financial issues. Ms. Munden will continue to work closely with you, and you will not be passed along to a paralegal or assistant after your first consultation, as is common with some high-volume bankruptcy firms. Kraft & Associates can help you get the “Fresh Start” that you deserve. Call Ms. Munden at (214) 999-9999 or (817) 999-9999, or you can e-mail her at firstname.lastname@example.org to arrange for your free consultation.