Misconceptions Regarding Bankruptcy

Many people believe that if they file for a Chapter 7 bankruptcy, they are back on easy street. The truth is: you may have to pay back the debt you owe, anyway.

Every state has its own rules regarding bankruptcy laws. For this reason, if you are considering any type of bankruptcy protection, we strongly urge you to consult with an attorney in your state who specializes in bankruptcy procedures. You may not have the option of filing a Chapter 7 bankruptcy if the courts determine that you make too much money. The courts may make you file a reorganization, or Chapter 13 bankruptcy. So, instead of having your debt completely forgiven (Chapter 7), the court where you live may force you into filing a Chapter 13 bankruptcy.

Finally, if a creditor can legally prove that you were fraudulent in filing for bankruptcy and never had any intention of paying back your creditors, it is very possible that the court would rule in favor of the creditors and you would end up paying off all of your debt, anyway.

(This discussion does not constitute any legal advice, either explicit or implied. It is highly recommended that you seek legal counsel in your state for specific legal advice).