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Johnson County, KS 913.225.8330
Kansas City, MO 816.656.2652

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Common Misconceptions About Bankruptcy

The term, “bankruptcy” is often tied to a negative connotation. No one is immune to financial difficulties — even the rich and famous. As a common newsworthy topic, celebrities and sports figures alike, are often put on display through the media and labeled as “bankrupt.” While these terms are often used to stir up buzz and drama for readership and ratings, it has drummed up some unfortunate misconceptions. These untruths have deterred people from seeking bankruptcy as a positive option in gaining a healthy financial future.

Here are some common things you may have thought were true about filing for bankruptcy that are actually false.

Bankruptcy is Shameful

You are NOT a terrible person if you file for bankruptcy. Whether business or personal, there are many reasons why someone may have gotten into debt, such as — medical bills, student loans, and unforeseen unemployment. Making the decision to file for bankruptcy to help you and your family does not define who you are, your character or worth as a person.

I Need Money to Pay a Lawyer to Find out About or Receive Bankruptcy Protection

At Moore & Associates, LLC, not only do we offer free initial consultations, but clients may also retain our services for no cash upfront. Chapter 13 petitions in KS can be filed with no cash at the time of filing if you can make your Chapter 13 payments by wage withholding. In MO, you can file a CH13 with only the court filing fee of $310. You can retain one of our attorneys to file a Chapter 7 case for as little as $100 upfront and make payments for court costs and other fees prior to the filing.

I have to pay all of my debts back if I file Chapter 13

For the vast majority of filers the same debts that can be discharged in Chapter 7 can also be discharged in Chapter 13. It depends on your income level and the amount of assets that you have. Most people use Chapter 13 to pay off the debts that are not dischargeable like car loan, mortgage, taxes etc. Come in for a free consultation and one of our Kansas City and Johnson County Attorneys can help you draft an affordable plan to get your finances back on track.

My Credit Will Be a Mess for at Least 7 Years After My Bankruptcy

Bankruptcy is a process to help you create a solid credit foundation. Depending on what your credit score was when you filed, you could see your score exceed 650 within two to three years. If your credit was already damaged, bankruptcy will have little effect. If you are proactive and file before you get substantially behind on your bills you should be able to get your FICO score back up significantly faster, usually within one to two years. However, you must take the appropriate steps to rebuild. At your initial consultation with one of our Kansas City and Johnson County attorneys we will explain the most efficient way to get your credit back on track.

Bankruptcy Will Ruin My Financial Future

Many believe that filing for bankruptcy will hinder them from achieving a stable financial future. The truth is, bankruptcy can help someone who is overwhelmed by debt. Many people who have filed for bankruptcy have been successful in re-establishing their credit as well as obtaining good credit score ratings within 2 to 3 years of filing.

I Cannot File Bankruptcy If I Make Too Much Money

All individuals and families have the right to file bankruptcy. The amount of income and assets that you have can impact how your debts are treated or which chapter you can file. Even if you are a high income filer, bankruptcy can put you in a position to hit the reset button, stop the creditor harassment and get yourself back on track.

I Will Lose My Home if I file Bankruptcy

Filing for bankruptcy does not mean you will lose your home or any other assets. While each situation is unique, you may not have to give up your personal property or any other assets. Kansas and Missouri both have exemptions in place that protect consumers from creditors. Filers may have the option to set up affordable payment plans to pay off car loans and other secured debts.

I Cannot File If I Have a Job

Not at all, in fact the bankruptcy code favors filers that are employed and in a position to receive their fresh start and have the steady income necessary to allow them to prosper after filing.

If you are behind on your mortgage payments and you are facing foreclosure, Chapter 13 bankruptcy may be a viable option. In this case, consult a bankruptcy attorney to understand your options.

Clients come to our firm with concerns about their credit and assets based on many common bankruptcy myths. If you are up against an overwhelming amount of debt, filing for bankruptcy may be the best option. No matter how bad your financial situation, Moore & Associates will be able to answer your questions and ease your concerns. Contact our Kansas City bankruptcy attorneys for a free initial consultation to find out if bankruptcy is the right option for you.