Submitted by New Jersey Bankruptcy Lawyer, Lee M. Perlman
My credit is going to be destroyed
Most of the time a client’s credit report has been impacted before they see me.
There are late credit card payments, collection accounts or a foreclosure.
While the bankruptcy will remain on your credit report for 7-10 years post discharge,
depending on the credit reporting agency, it is how you behave AFTER your discharge that matters most.
In many cases you can expect your credit score to improve in about 6 months to a year after your discharge to a range of 650-700.
How can I file when I am going to lose everything
Most chapter 7 bankruptcies where creditors are not paid are considered “no asset cases.”
This means that in the majority of cases that are filed you keep your property.
This is because there are exemptions available to you when you file. Think of them like credits.
In most cases if your house and car are below a certain dollar value and you can maintain payments after you file, you keep your home and car. You have enough exemptions or “credits” to cover all of what you own.
In most cases your house and car will not be impacted. This also goes for furniture, household items and jewelry. No one comes to your house to inventory your personal property.
I make too much money and will have to file chapter 13 and pay everyone back
Filing is based on income and household size. There is also a means test formula that should be run by an attorney.
You wouldn’t want to read your own medical test results would you?
If you do not pass the means test and it decided you must file a Chapter 13 another misconception is that you will have to pay back all your creditors. It could be 10% payback, It could be 80%. The first step is to allow a lawyer to review your budget and means test.
My bankruptcy filing will be published in the newspaper and all over the internet
Untrue. Today typically only business bankruptcies are published in the paper and “newsworthy”.
In order to determine if someone has actually filed bankruptcy the individual searching would need to be subscriber to Pacer account and pay fees.
This online court website is usually only limited to lawyers and institutions.
At this time it remains difficult and uncommon to locate a filing through a “straight Google search.”
There is a minimum amount of debt required to file
The amount of debt is not the determining factor in filing. It really is how difficult or disruptive the creditor’s conduct is. For example, if you are on a fixed income and a have little debt, there could be aggressive creditors after you that want to levy your bank account or garnish your wages. The “amount” of the debt should not and is legally not the focus for your filing.