Tag Archives: bankruptcy myths

Bankruptcy Myths: ‘The Creditor Harassment Will Never End’

While many people decide to file Chapter 7 or Chapter 13 bankruptcy precisely because they want to end creditor harassment, I still get the occasional consumer who expresses fear that the phone calls from debt collectors will continue. Some people believe that the harassment will grow even worse. Ultimately, nothing could be further from the truth, because as soon as you file Chapter 7 or Chapter 13, the filing creates an injunction called an automatic stay. The stay expressly prohibits your creditors from taking any further collection actions against you or your assets, effectively ending phone calls, letters, lawsuits, garnishments, repossessions and threats of foreclosure. The automatic stay is not only powerful in ending harassment, but it can also carry stiff penalties for any creditors who violate it, including contempt, damages or sanctions. There are a few exceptions to automatic stay provisions which a Maryland bankruptcy lawyer can help explain…
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Bankruptcy Myths: ‘I Don’t Meet the Minimum’

I am always surprised when a client of mine asks if they are “far enough” into debt to file bankruptcy. There is no minimum amount of debt required to file bankruptcy. There are, in fact, maximum amounts of debt that can prevent you from filing Chapter 13, but as far as bankruptcy goes, while there might be a ceiling, there is no floor. It is important to note that while you might be able to file bankruptcy with a very small amount of debt, that does not necessarily mean that you should file with such a small amount of debt. Still, every case is different, and whereas a debt of $5,000 can be perfectly manageable for a family with a six-figure income, the same debt could be devastating for a household that might be dealing with a long period of unemployment or health care needs. Bankruptcy was designed to help…
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Bankruptcy Myths: ‘I Will Never Get Credit Again’

Bankruptcy has provided much-needed relief for countless Americans, yet some of the people who stand to benefit the most from filing Chapter 7 or Chapter 13 choose not to, mostly out of fear. Unfortunately, oftentimes I have found that clients of mine resisted exploring their bankruptcy options because he or she took one or more popular myths about filing to be the truth. This week, I will attempt to debunk a few of the more popular myths. One of the most common myths concerning bankruptcy has to do with what happens to the credit of the person filing. Some homeowners have been told that their credit will be irreparably damaged for 10 years, while others seem convinced that they will never be able to get credit again. Of course, neither belief is actually true. In fact, because you get rid of debt in a Chapter 7 or Chapter 13 bankruptcy…
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