Bankruptcy Myths Revealed

Get the facts from an experienced professional

Bankruptcy can sometimes have a bad name - many people feel uncomfortable with the idea of filing for bankruptcy and the negative stigma that it holds. If you are like thousands of Americans, though, bankruptcy could help you significantly overcome your financial burdens and lead you to a path of financial freedom. Furthermore, many of the negative associations out there about bankruptcy are simply untrue or inaccurate.

At my firm, I strive to assist clients in effectively conquering this troubling time, and I will use my experience and knowledge of the New York legal system and federal bankruptcy laws to assist you. Below, you will find answers to some of the most misunderstood bankruptcy myths.

If you are seeking answers about specific questions you may have, do not hesitate to contact me, Natasha Meruelo, Attorney at Law, today.

Fact vs. Fiction

Filing for bankruptcy will ruin my credit.
No! While filing for bankruptcy will stay on your credit report for a period of years, bankruptcy can actually help you rebuild your credit. Bankruptcy can act as a clean slate, lowers your debt to income ratio, and you can start to open new credit cards and rebuild your debt once you receive your discharge or sooner in some circumstances.

Everyone will know that I have filed for bankruptcy.
Gone are the days of published bankruptcy in the newspapers. While bankruptcy does appear in certain documents such as your credit report, it is not advertised to the world. You probably know at least one person who has filed bankruptcy and yet have no idea that they filed unless they have told you themselves.

My spouse is filing, so I have to file, too.
No, you do not. There is no requirement that just because you are married, you both have to file bankruptcy. Your credit is separate from your spouse's and usually only the person who is legally responsible for the debts should consider filing for bankruptcy. However, there are exceptions to every rule and I can help you determine if you and your spouse would both benefit from filing together. As an experienced attorney, I can help!

I cannot save my home from foreclosure.
Yes you can! By filing for Chapter 7 or Chapter 13 bankruptcy, you could stop the foreclosure process and regain control of your finances. You can also determine if you may be eligible for a loan modification or afford to repay your mortgage arrears over time. To determine which chapter is right for you, contact my firm as soon as possible.

I will lose all my assets and properties in bankruptcy.
No, you will not lose your assets or properties. In fact, even in Chapter 7 bankruptcy (liquidation bankruptcy) there are numerous assets and property that are considered exempt - including your home and your primary source of transportation. While there are caps on how valuable these assets can be to be considered exempt, most of the time, I can help clients protect these assets. I can help you determine if there are any risks to your assets and property in bankruptcy during our free initial consultation.

Bankruptcy is shameful.
Absolutely not! There are thousands of Americans who file for bankruptcy each year. Bankruptcy can happen to anyone - from the blue collar worker to a doctor or lawyer - and most situations are due to an event or difficulty that is completely out of your hands. Bankruptcy is an honest way to help you rebuild your credit and regain financial control of your life.

I have medical debt. I am not eligible for bankruptcy.
Medical debts are one of the many types of debts that can be discharged through bankruptcy. If you were involved in an accident, or had a sudden illness that required you to accumulate debt in order to make ends meet, you may be able to discharge these debts through bankruptcy.

I owe taxes. These cannot be discharged in bankruptcy.
If you owe income taxes, you may be able to discharge them in either chapter of bankruptcy. In addition, most of the time, penalties for filing late or failing to pay your taxes can also be discharged. These can be a significant part of your tax debt. Complex rules apply to determine if taxes are dischargeable and you should consult with a bankruptcy attorney before state or federal tax liens are filed to maximize the potential bankruptcy benefits available to you.

Schedule a Consultation

Are you ready to get started on the road to a debt-free financial future? Contact Natasha Meruelo, Attorney at Law today and schedule your free consultation with my staff!

* This is Attorney Advertising. Natasha Meruelo, Esq., designated as a Federal Debt Relief Agent by an Act of Congress and the President of the United States, proudly assists consumers seeking relief under the US Bankruptcy Code. Prior results do not guarantee a similar outcome; see attached- 342b and 527a/b .

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