Robert Jacquard


Added: 08/02/2011

Bankruptcy Myths Debunked

By Bob Jacquard, Esquire

Myth: You won’t be able to borrow money for at least ten years following a bankruptcy.

Truth: You can rebuild your credit score immediately. Some ways to rebuild your credit include taking out secured loans and credit cards, and making your payments on time. Many lenders consider you to be a better risk after a bankruptcy.

Myth: You will lose your house to foreclosure and your car will be repossessed.

Truth: Property exemption is common in bankruptcy filings. You can exempt your mortgage, car loan, and any other debt for property. In short, you can keep your home and car, as long as you continue to pay the bills.

Myth: You will never get a mortgage approved so you can move out of your apartment.

Truth: Nobody’s credit history is perfect, and lending institutions approve mortgages for people who have filed bankruptcy every day – often within the first year after filing.

Myth: Bankruptcy is a form of theft and cheating the system.

Truth: America was founded on the very belief in fresh starts. Most people have repaid their original credited amount by the time they decide they can’t keep up with excessive interest payments and late fees.

Before filing bankruptcy

By Bob Jacquard, Esquire

If you can’t decide whether to file, consider these questions:

  • Are you paying more than 25% of your family take-home pay to creditors?
  • Are you juggling credit payments and accumulating late fees by not paying?
  • Have you opened a new credit card account to pay off a higher-interest old one?
  • Have you taken a credit card cash advance to pay bills?
  • Are you making minimum monthly payments on more than one credit card?
  • Have you put off paying bills because of an unexpected expense?
  • Are you still paying for holiday gifts purchased more than one year ago?
  • Have you refinanced your house in order to “catch up” on your credit bills?
  • Are you arguing more about money than you did a year ago?

Answering yes to any of these questions means that you could be sinking into a credit hole. Millions of Americans have started a new life by filing bankruptcy. Chances are many of your friends, neighbors, and co-workers have.

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