Bankruptcy Myths

There are several myths about bankruptcy filing. Here are 2 bigger myths on bankruptcy:

Myth1 - My credit will be ruined completely.
It will not be long before you are receiving credit card offers and loan offers again. There are numerous companies that will provide credit to you after a bankruptcy. Keep in mind that the interest rates will likely by high for the first few years. However, we do not advise any of our clients to run up the bills again, but if someone does need an automobile for example, they will be able to get credit and purchase their desired vehicle. Also, if you have a credit card with a zero balance on the day you file for bankruptcy, you don’t have to list it as a creditor since you don’t owe any money on it. That means you might be able to keep that card even after the bankruptcy.

Unless you are a prominent person or a major corporation, the chances are very good that the only people who will know about a filing are your creditors. While it’s true that bankruptcy is a public legal proceeding in Ohio, the number of people filing for bankruptcy protection in Ohio is such that very few publications have the space, the manpower or the inclination to run all of them. Moreover, who has the time to go to the Bankruptcy Court and search through millions of documents to find your bankruptcy?

Myth 2 - The government will go after my car, property & other assets if I file for bankruptcy
This is the misconception that keeps people who really should file for bankruptcy from doing it here in Ohio. Many people think the government will sell everything they have and they’ll have to start over in a cardboard box, which is not true. While the bankruptcy laws vary from state to state, every state has exemptions that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing. Even better is the fact that Ohio has some of the best exemptions in the country if used correctly.

For most people, they will keep everything they have through the bankruptcy here in Ohio. Moreover, if you have a mortgage or a car loan, you can usually keep those as long as you keep making the payments. From experience, this is one of the areas in which it is essential to have a competent Ohio bankruptcy attorney. Using the wrong exemptions can cause you to lose property that could have been easily kept if your Ohio bankruptcy case was done correctly.

Exemptions are protected allowances for the value in certain assets. For example, a homestead exemption protects the equity you have in your home, up to a certain value. All States have different exemption laws which protect the value in certain assets. In most circumstances, you will be able to keep much of your property since Ohio has recent increased the exemptions permissible. However, you need a qualified Ohio bankruptcy attorney to discover any possible problems prior to filing your bankruptcy case. We cannot tell you how many times we see a person in court loose a house, car or motorcycle because they either did not have an attorney or used a bankruptcy filing service and did not have any attorney representation. Hiring an attorney is a small price to pay in order to insure that you will not have any unexpected surprises.

In most cases, you will use Ohio exemption laws to exempt most, if not all of your property. However, if you lived in more than one State in the past 2 years, you may have to use the other states laws. It is extremely important that we discuss in detail the particulars of your situation so I can research the law and provide you with some pre-bankruptcy planning to ensure you can keep almost everything and discuss any potential problems.