By Willie Glascock, Attorney
We handle Chapter 7 and Chapter 13 bankruptcies at Tom Bible Law, but I mostly focus on the Chapter 7s, and that’s what we’ll talk about in this blog post. Understandably, there’s typically a lot of anxiety surrounding bankruptcy, and people have a lot of questions.
In working with so many clients, I have heard it all, and one thing I have noticed is that there are several misconceptions and myths floating around out there. TV shows, movies, and the media probably add to the misunderstanding of what bankruptcy actually is and what that means, so in this post, I will clear up some of the top myths we’ve seen.
- You will have to meet with a judge. Probably 95% of Chapter 7s don’t ever see a judge. If your case is straightforward, and there’s nothing strange going on, you won’t have to meet with a judge.
- The people you work with on filing bankruptcy will be judging you. Bankruptcy is simply a monetary calculation, and having the ability to file for bankruptcy is your right. It’s not something to be ashamed of. But people are nervous about who they’re going to meet with in court and what that person is looking for. When you file a Chapter 7, you have a meeting of creditors. The Chapter 7 trustee is the one who looks to see that everything was filed correctly, and mostly they are looking for assets. People often think of this person as the moral police, or they think this person is a judge. But they are basically a representative for unsecured creditors as a whole. They are not there to throw stones, call you a bum, or guilt trip you. A lot of people have anxiety over this, but there’s no reason to worry about it.
- Your credit will be destroyed forever. The bankruptcy will stay on your credit report for several years, but it will just be a notation that’s not supposed to affect your score. Filing bankruptcy basically zeros out your credit, and you get a chance to start over, which can be a good thing. You won’t have those delinquent accounts you wouldn’t have been able to pay otherwise or that would have been dragged out for years. After about a year or a year and a half, you can get your credit back up.
- You won’t be able to keep your car or your house. There are qualifications and limitations, and this won’t apply to everyone, but many people will be able to keep these assets as long as you’re close to being current on payments.
- Filing bankruptcy is a long, hard process. Chapter 7 bankruptcy is the one where you throw your hands up in the air and say, “I declare bankruptcy,” and you’re pretty much done as long as you don’t have any hidden assets. There is paperwork involved, which probably takes an hour or two, and you will have credit counseling. After meeting with the Chapter 7 trustee, that’s pretty much all that’s involved.
- It will take forever for the protection of bankruptcy to kick in. Many people think you have to get to a discharge in a Chapter 7 to get the protection, but as soon as you get the paperwork in, that’s the triggering event. It will not be months before you get any relief. The protection will be instantaneous.
If you are struggling with excessive debt and looking for a sound solution, the attorneys at Tom Bible Law, can help you explore your legal options. We have helped numerous clients from Chattanooga and throughout Tennessee and North Georgia achieve their debt relief goals by guiding them through the bankruptcy process. We work with every client personally, giving each and every bankruptcy case the time and attention it needs. We understand the financial pressures our clients are facing and work to resolve their debt problems in a favorable, cost-effective manner. Our bankruptcy lawyers have more than 40 years combined experience and are here to help. Call us today at 423.424.3116 or drop us a note here.