I recently came across a blog called “Get Out Of Debt Guy”, authored by Steve Rhode, blogger and former bankruptcy debtor. While his website is much more than articles about bankruptcy, the one thing that stood out to me were his refreshingly positive articles and Q&A’s about filing bankruptcy. In fact, he makes the statement “If you file for bankruptcy your life will get better.” As a bankruptcy attorney I spend my days pitching bankruptcy to clients, explaining how it is the best option for them to get a speedy and cost effective result, yet they are skeptical and want to avoid the process at all costs. In this article, Steve discusses 27 myths about bankruptcy and he is spot on with his answers. I almost feel like he bugged my office and took the words right out of my mouth!
The key to avoiding the pitfalls discussed in these myths is to have effective legal representation. While you do not have to have an attorney in order to file for bankruptcy, having one can help you avoid several pitfalls.
“I’ll lose my home or car”- while this is generally a bankruptcy myth, there are occasions it is a reality. Debtors who do not properly schedule or value their assets and/or know their state’s respective exemption laws, could lose their house, car, jewelry, cash etc.
“I make too much money to file bankruptcy” – while this is never the case, you may make too much money to file for Chapter 7 bankruptcy. The only way to know whether or not this applies to you, is to have an experienced practitioner run a “Means Test” for you, using the correct analysis of your income (here’s a hint, it’s not just what’s on your most current paystub!), and the correct expense analysis (another hint, it’s not always what you actually spend spend).
“Bankruptcy can’t eliminate taxes”- there are restrictions and some or all of your tax debt may not be eliminated. There are rules, including the 3 year, the 2 year and the 240 day rule; not even every bankruptcy attorney can accurately advise on tax issues because of the complicated nature of tax dischargeability.
These are just a few of the pitfalls an experienced bankrutpcy practitioner can help you avoid.
It’s not often in the media that I find accurate information on bankruptcy, as well as someone who is a vocal advocate for the process that isn’t an attorney selling their services. I find Mr. Rhodes site to be refreshing, informative and very accurate. Of course with anything, laws vary state to state and anyone with questions about bankruptcy and debt relief should consult a legal professional in their state to ensure the accuracy of Steve’s, or anyone else’s published information.
Tiffany Franc is an attorney in PK Law’s Corporate and Business Services Group. She provides Chapter 7 and Chapter 13 legal advice and representation to individuals, and advice on bankruptcy alternatives, including debt restructuring and rehabilitation, to consumers facing debt collection, garnishment, liens and foreclosure and is trained in handling short sales and mortgage loan modifications. Ms. Franc can also assist businesses and individuals with navigating bankruptcy as a creditor.
In addition, Mrs. Franc represents clients in adoption proceedings (adult, step-parent, 2nd parent, interstate (ICPC) and finalizations in MD of out-of-state or out-of-country placements), child custody/access and child support matters, absolute and limited divorce hearings, prenuptial agreements and settlement negotiations in family law matters.
Tiffany can be reached at 410-832-5450 or firstname.lastname@example.org.