Common bankruptcy myths finally debunked
Several years ago, a fellow bankruptcy attorney told me that our job as bankruptcy attorneys is to get our clients to tell us all the “Queen of Dairy Law” they know. “Dairy Queen Law” is all bankruptcy laws that clients learned at the local “Dairy Queen” from friends, family, waitresses, and other clients. We have to get our clients to tell us what “Dairy Queen Law” they have learned, and then we, as lawyers, must tell them the truth about bankruptcy. Well, here’s a common “Dairy Queen’s Law”, followed by the truth.
Your employer and the local newspaper will be informed that you have filed for bankruptcy.
When you file a Chapter 7 case, the employer is not notified of the bankruptcy. If you choose to file a Chapter 13 case, you are asking your employer to garnish your wages to pay your creditors under a court-approved Chapter 13 plan that you file. Your employer is notified of the bankruptcy because you request that your wages be garnished. This is one of the many reasons our law firm now attempts to file as many cases as there are Chapter 7 cases.
Our local newspapers do not publish those who have filed bankruptcy (unless they are Donald Trump, American Airlines, Walt Disney, or similar famous people or companies). In my 30-year bankruptcy practice, the only bankruptcy case that appeared in the local newspaper was the Chapter 7 case that I filed for a local microbrewery. The article was much more about the brewery than it was about filing for bankruptcy.
You have to be very poor to file for bankruptcy
The 2005 amendments to the US Bankruptcy Code made the forms necessary to properly file a bankruptcy case very difficult. However, we present cases for the very poor and other “not so poor” people who are in financial difficulty. We offer a free consultation and we can help you find a solution to your debt problems. Most of our clients believe that they are very distressed when they first enter our office and leave confident that they have found a solution to their financial problems.
Your credit will be ruined forever
False! Most of the clients who come to our office are in serious financial trouble, and bankruptcy eliminates those debts and sets them off on a fresh start. Most of our Chapter 7 clients finance late-model vehicles while their bankruptcy cases are pending. Working to restore credit after discharge will allow clients to finance homes starting two years after bankruptcy discharge. Bankruptcy is a solution to a financial problem and generally dramatically improves the credit and financial problems of our clients.
New laws make bankruptcy impossible
In 2005, the United States Congress made drastic changes to our bankruptcy laws. Unfortunately, the effect of these laws is only to make the price of filing bankruptcy more expensive for consumer debtors. The forms that must now be filed when filing a bankruptcy case are very complicated. In fact, I teach continuing legal education classes in which I instruct attorneys and paralegals on how to properly prepare forms to get the best possible result for their clients. It is very important that you hire a very experienced and knowledgeable bankruptcy attorney to represent you in this very complicated area of the law. Millions of Americans filed for bankruptcy before the law changed, and millions are doing so now that the new laws have gone into effect.