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Bankruptcy Myths

Bankruptcy Lawyers in Indianapolis The Truth about Bankruptcy

Thirty years of helping individuals and business owners with the bankruptcy process and all its related issues will teach you a lot. One of the things we've learned is that mistaken ideas, misconceptions, and myths about bankruptcy will never be in short supply.

We'd like to dispel a few of those, right here.

Common Myths

1. "Chapter 7 wipes away all of my debts, right?"
No. While Chapter 7 will erase most debts — others such as student loans, child support, alimony obligations, debts incurred by fraud, and judgments against you are not likely to be wiped away in Chapter 7.

2. "The new laws make Chapter 7 impossible to qualify for."
No. Although the new laws do steer some people towards Chapter 13 — many people who would have qualified for Chapter 7 under the old laws are still able to do so today.

3. "My reputation will be ruined."
No. Unless you're a celebrity, public official, or another type of well-known person, chances are good that the only people who'll be aware of your bankruptcy are the creditors affected by it. Even then, most people experience financial difficulties at some point or other in their lives and understand how easily debt can spiral out of control.

4. "I'll never be able to buy a car or get another mortgage."
Again, no. A Chapter 7 bankruptcy will stay on your credit report for up to 10 years, a Chapter 13 for up to seven. And although it does take some time to rebuild your credit after bankruptcy, most people can accomplish this in less time than you might think — especially if they reaffirmed a home or car loan in the bankruptcy process.

5. "I owe too much in taxes; bankruptcy can't help me."
While this statement could be true, it is not always the case. In cases where tax returns have been filed and the taxes are more than three years old, the older taxes may be dischargeable.

6. "I went through bankruptcy once; I'm not eligible."
No. If there were a rule that said you can only have one major injury, or one illness, or lose one job, or have one and only one bad thing happen to you over the entire course of your life — if there were a rule like that then… maybe. But there's not a rule like that and the U.S. Bankruptcy Code reflects that fact. A Chapter 7 may be filed once every eight years. A Chapter 13 can be filed on the heels of a Chapter 7 but if you want to receive a discharge of debts in the Chapter 13 you must wait at least four years between a Chapter 7 and a Chapter 13.

Central Indiana Bankruptcy Solutions — Toll Free 1-866-660-6928

Credit card debt? House foreclosure? Car repossession? Redman Ludwig, P.C. can help.

Our attorneys represent individuals and business owners throughout Central Indiana in all aspects of preparing for, filing, and dealing with bankruptcy. Call an experienced bankruptcy lawyer at our Indianapolis law offices directly or reach us online by completing the brief form located on the contact us page of this Web site. We offer reasonable payment plans and will deduct initial consultation costs from your fee should you decide to retain us.

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