Common Bankruptcy Myths a Houston Bankruptcy Lawyer Can Dispel

Recent changes in bankruptcy laws have resulted in many misconceptions about filing bankruptcy. Sometimes, these myths prevent people from considering bankruptcy as an option, which can result in the needless loss of homes, vehicles and other valuable assets. Whether you ultimately decide to file bankruptcy is a personal decision, but it is one best made with the full advice and guidance of an experienced houston bankruptcy lawyer. At the Law Office of Patrick T. Williams, you will receive the benefit of a personalized analysis of your financial situation with a skilled bankruptcy attorney, which will put you in the best position to make a decision regarding bankruptcy. Additionally, your Houston bankruptcy attorney can advise you about the most common bankruptcy myths, as follows.

Bankruptcy Will Wipe Out All of My Debts

Although bankruptcy can eliminate your obligation to repay many different types of debt, there are some debts that bankruptcy does not discharge. Student loans, child support, alimony and income taxes are among the most common of these debts.

I Can Only File Bankruptcy Once

While there are time limits that restrict repeated bankruptcy filings, you are eligible to file bankruptcy more than once. More specifically, if you have already filed Chapter 7, you must wait eight years to file another Chapter 7 case or four years to file a Chapter 13 case. If you have a previous Chapter 13 case, you can file another Chapter 13 case at any time, but you will not receive a discharge unless two years have passed, and you must wait six years before you can file a Chapter 7 case.

I Will Lose Everything I Own If I File Bankruptcy

Federal and state laws both allow you to keep property up to a certain value in a bankruptcy case. For instance, when you file bankruptcy, you are entitled to a homestead exemption to protect your home. In Texas, if you purchased your home more than three and a half years ago, you can protect the entire value; if the home is newer, you can still protect up to $125,000 in equity.

Texas and federal law also provide personal property exemptions that allow you to keep certain items of personal property. Houston bankruptcy lawyer Patrick T. Williams can review your assets and advise you regarding whether you can keep them.

I Will Ruin My Credit Permanently if I File Bankruptcy

While filing bankruptcy will affect your credit negatively, it will not ruin your credit permanently. You can begin rebuilding your credit rating immediately, and it may surprise you how quickly you are able to do so.

I Cannot File Bankruptcy If I Am Working

You do not have to be unemployed or have no source of income if you wish to file bankruptcy. On the contrary, many people who file bankruptcy have jobs, particularly when they are filing Chapter 13 bankruptcy. Since Chapter 13 bankruptcy requires a monthly repayment plan over a number of years, it follows that a large number of people who file Chapter 13 bankruptcy are employed and able to make those monthly payments pursuant to the repayment plan. Even Chapter 7 debtors can have jobs, as long as their income is low compared to their expenses and their household size.

I Cannot Afford to Pay a Bankruptcy Attorney

Bankruptcy attorneys do charge fees; however, the fees are relatively low, and filing bankruptcy without an attorney is a bad idea. In a Chapter 13 bankruptcy case, your attorney builds his fees into the payment plan. In any case, the payment of a minimal attorney’s fee to file bankruptcy can be well worth it if you are able to stop a mortgage foreclosure or discharge thousands of dollars in debt.

Contact the Law Office of Patrick T. Williams today for a free consultation if you are considering bankruptcy.