Bankruptcy Myths

Thanks to its increasing popularity ever since the recent downfall of the economy, there are several myths associated with bankruptcy. These myths can both prevent people from filing for bankruptcy when they really need it, as well as encourage people to file for bankruptcy who may have other options.

At Bastarrika, Soto, Gonzalez & Somohano, LLP, our attorneys are committed to keeping a clear and open line of communication with our clients. We understand how confusing and complex this process can be, and we are dedicated to giving you the information you need to feel empowered to make smart choices about your case.

We have compiled a list of common myths that people often ask about when considering bankruptcy:

  • By filing for bankruptcy, you are going to lose everything, including your car and your house. Chapter 7 bankruptcy will not remove your obligation to make payments on secured debt (like your house and your car), and if you miss payments while you are under the umbrella of your filing, your home and car could be repossessed. But in all cases, we will make sure that you understand what is expected of as you journey toward a more secure financial future.
  • You have to be at your absolute lowest financial point to file for bankruptcy. Actually, all you have to prove is that you own more money that you have. There are no minimums in bankruptcy. We will, however, explore your financial situation and explain to you if bankruptcy is the best option for you.
  • If you file for bankruptcy that means you do not know how to handle your finances. On the contrary, in many situations, the need to file for bankruptcy occurs after an unexpected life circumstance like a car accident, a criminal charge, a divorce, unemployment or a medical need.
  • Bankruptcy dissolves all debt. Unfortunately, there are a few financial responsibilities that evade the bankruptcy process. These include child support, alimony, restitution as it relates to a criminal conviction, student loan debt and some tax debt. There are ways, however, to discharge or reduce these payments outside of bankruptcy court. We can help you navigate those processes.
  • Bankruptcy destroys your credit. In actuality, it wipes the slate clean. This is a refresh of your credit score, and you will receive credit card offers in the mail sooner than you think.

Contact The Lawyers At Bastarrika, Soto, Gonzalez & Somohano, LLP

If you have a question that is not on this list, or you feel ready to discuss your options as they pertain to bankruptcy, call our Bergen County and Passaic County law firm at  201-212-4572, or email us.