Bankruptcy FAQs and Links

Useful Links and Frequently Asked Questions

Bankruptcy laws are complex and confusing. At The Law Offices of Wayne Greeson PC, we've put together a guide of useful links to help you to better understand your situation and what we can do to help you.

Southern District Indiana Bankruptcy Court

National Association of Consumer Bankruptcy Attorneys

Indiana Supreme Court

You know all those bad things, you have always heard about bankruptcy?
Most of it is NOT TRUE!

Here are the Top 15 Myths about bankruptcy and the REAL TRUTH.

Myth 1: Everyone will know you have filed for bankruptcy.
Myth 2: You will lose everything you have.
Myth 3: You will never be able to own anything again.
Myth 4: You will never get credit again.
Myth 5: Filing bankruptcy will hurt your credit for 10 years.
Myth 6: If you are married, both you and your spouse have to file for bankruptcy.
Myth 7: It's really hard to file for bankruptcy.
Myth 8: Only deadbeats file for bankruptcy.
Myth 9: Filing bankruptcy means you are a bad person.
Myth 10: Filing for bankruptcy will hurt your credit.
Myth 11: Even if you file for bankruptcy, creditors will still harass you and your family.
Myth 12:If you file for bankruptcy, it may cause more family troubles and may even lead to divorce.
Myth 13: You can't get rid of back taxes through bankruptcy.
Myth 14: You can only file once for bankruptcy protection.
Myth 15: You can pick and choose which debts and property to list in your bankruptcy.

Myth 1: Everyone will know you have filed for bankruptcy.

Unless you are a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors and the people who you tell. While it's true that your bankruptcy is a matter of public record, the number of filings is so massive, that unless someone is specifically trying to track down information on you, there is almost no likelihood that anyone will even know you filed. However, telling someone that someone else filed bankruptcy is good gossip, just like telling someone you heard so-and-so is getting a divorce. So, if you don't want everyone you know to know you filed bankruptcy, you need to keep the information to yourself. Most newspapers don't include information about who filed bankruptcy, and even if they did, who would be interested enough to read that stuff.

Myth 2: You will lose everything you have.

Fact: most people who file bankruptcy don't lose anything.
Every state has exemptions that protect certain kinds of property. Indiana has exemptions to protect such things as your house, your car, your truck, household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, and wages. If you have more property than can be protected by the available exemptions, you can take Chapter 13 bankruptcy. In Chapter 13 bankruptcy, you can keep your property by paying a higher Chapter 13 plan payment.
So, if you want to keep a car, truck, home or business equipment that serves as collateral for a loan, you need to keep paying on the debt. If you make these payments and have exemptions to cover any value above what is owed, you will be able to keep these items.

Myth 3: You will never be able to own anything again.

This is completely false. After bankruptcy, you can buy, own and possess whatever you can afford.

Myth 4: You will never get credit again.

Not true. Bankruptcy helps you get rid of debt obligations and when you do this it puts you in a position to handle more credit. This makes you look better to would-be lenders. After bankruptcy you will get plenty of credit card offers again. But don't get right back in debt again. Usually, the would-be lenders will want more money down and will charge you higher interest rates. If you are careful, keep your job, save your money, pay your bills, you can rebuild your credit report and the quality of your credit will get better and better. You can re-establish good credit in 2 to 4 years after bankruptcy sufficient to buy a car or a house, if you don't do anything else to hurt your credit.

Myth 5: Filing bankruptcy will hurt your credit for 10 years.

This is a myth and is not true. It is true that bankruptcy is reported on your credit report for 10 years, but just because something is reported on your credit report does not mean it will hurt your credit standing for 10 years. If you need to see a bankruptcy attorney, your credit is already messed up or maxed out or both. Your credit is already hurting and filing bankruptcy will help you in the long run.
You should be able to re-establish your credit in 2 to 4 years after you file bankruptcy, whether or not you have filed bankruptcy.

Myth 6: If you are married, both you and your spouse have to file for bankruptcy.

This is not true. When both a husband and wife have a lot of joint debt, filing together makes sense and saves money, but it is not a requirement under the law. I have many cases where only one spouse has filed. If it makes sense for spouses to file together, then they can file for the price of one filing fee.

Myth 7: It's really hard to file for bankruptcy.

No, not at all, at least not when you let an experienced bankruptcy attorney represent you. With an experienced bankruptcy attorney, filing bankruptcy is easy. The decision to file may be hard, but once the decision is made, filing is easy.

Myth 8: Only deadbeats file for bankruptcy.

This is another myth, it's just not true. Most people who file bankruptcy are good, honest, hard-working people. They file bankruptcy as a last resort, usually after struggling for many months to pay the bills that piled up after a life-changing event in their lives, like divorce, the loss of a job, a failed business venture, a serious illness or family emergency. Some honestly get into debt before they knew better, or how to budget or manage their money. Some wait too long to file and get deeper and deeper in debt. Bankruptcy is to help you get a new start when you get overwhelmed by debt.

Myth 9: Filing bankruptcy means you are a bad person.

Not true. Over 1,000,000 Americans file bankruptcy each year and they don't file because they are all bad people. There are a lot of good, honest, hard-working people who have difficult times and need to file bankruptcy. Many of us at some point in our life have money problems. The bankruptcy laws are there to help us when we get in a hole as a way to get out of debt, so we can have a second chance at a "fresh start".

Myth 10: Filing for bankruptcy will hurt your credit.

By the time most people come to a bankruptcy attorney, their credit is usually already damaged or maxed out. Filing bankruptcy can actually help you re-build their credit by getting rid of debt. Once you get rid of your debt you will be in a better position to handle new credit, if you really need it.

Myth 11: Even if you file for bankruptcy, creditors will still harass you and your family.

Not true. As soon as you file bankruptcy, the Bankruptcy Court issues an order telling all of your creditors to leave you alone. This means no more phone calls, no more collection letters and no more lawsuits. Repossessions and foreclosures are stopped. This order is called the "automatic stay". The automatic stay prohibits all collections actions against you. Creditors are not even allowed to talk to you. Any collection attempts started must stop. The automatic stay is very powerful and gives you the full protection of the law of the United States Courts. If a creditor violates the automatic stay, you have the right to sue the creditor and collect damages. Bankruptcies Judges punish often punish creditors who ignore the automatic stay. Once you file for bankruptcy, creditors must leave you alone or suffer the consequences.

Myth 12: If you file for bankruptcy, it may cause more family troubles and may even lead to divorce.

Filing bankruptcy is not the problem. In most marriages the problem is not being able to pay the bills. Not being able to do so cause a lot of stress. Unless you relieve this stress, it can quickly cause your marriage trouble. Bankruptcy will get you out from under your debt, to protect your property and to lower your stress. Filing bankruptcy could be a crucial first step in helping your marriage and your family.

Myth 13: You can't get rid of back taxes through bankruptcy.

This is partially true and partially false. It depends on how what kind of tax you owe and how old the tax debt is. Income taxes more than 3 years old can be wiped out under the law after 3 or 4 qualifications are met. Filing bankruptcy does not get rid of withholding or sales taxes no matter how old they are.

Myth 14: You can only file once for bankruptcy protection.

You can only file for a Chapter 7 bankruptcy once every 8 years. You can file a Chapter 13 Bankruptcy even sooner. Hopefully, you will never need to file more than one bankruptcy. But if you need to, it's good to know that you can.

Myth 15: You can pick and choose which debts and property to list in your bankruptcy.

No you can't. When you file bankruptcy you have to list all of your property and all of your debts. Often people tell me they want to leave out a debt because they want to keep paying on it. Even though you have to list the debt, if you want to keep paying on a debt after bankruptcy you can. After you are through bankruptcy, you can go back and pay back anybody you want. When you file bankruptcy there are some debts you have to keep paying on. For example, if you have a car, truck or house loan, if you want to keep the car, truck or house, you list the debt on your bankruptcy but you have to keep paying on the debt. As long as you stay current on the loan and keep the property properly insured you are protected under the law and you get to keep the property.

Contact The Law Office of Wayne Greeson at 765-825-9690 and let our attorneys help you with your legal and financial needs.

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