ARE YOU STUCK ON ONE OF THESE BANKRUPTCY MYTHS?
Experienced Bankruptcy Attorneys Helping Dissolve Myths and Find Real Solutions for clients in Tacoma and all of Pierce County
The mistaken belief about bankruptcy is that it is the result of irresponsibility. It is a common assumption that irresponsible people are the kinds of people who file for bankruptcy. Based on our experience in representing thousands of individuals and families, THIS IS CLEARLY FALSE! This is only one of many bankruptcy myths that Washington Fresh Start can dispel. Our mission is to help you understand the benefits of bankruptcy, as well as any alternative options that are available, so that you can find relief from your overwhelming debts. We understand that your debt may not be a result of your own choices and we will always treat you with the utmost respect and concern. Take part in a free case evaluation today to get the counsel that you need to get out of debt.
Common Misconceptions About Bankruptcy
ONLY IRRESPONSIBLE MANAGEMENT CAUSES BANKRUPTCY. Nothing could be farther from the truth. Bankruptcy was created by the government to help anyone get out from under excessive debts. This debt is often unexpected and not the fault of the consumer at all. The most common cause of bankruptcy are as follows:
MEDICAL EXPENSES. A study done at Harvard University indicates that this is the biggest cause of bankruptcy, representing 62% of all personal bankruptcies. Rare or serious diseases or injuries can easily result in hundreds of thousands of dollars in medical bills – bills that can quickly wipe out savings and retirement accounts, college education funds and home equity. Once these have been exhausted, bankruptcy may be the only shelter left, regardless of whether the patient or his or her family was able to apply health coverage to a portion of the bill or not.
JOB LOSS. Whether due to layoff, termination or resignation, the loss of income from a job can be equally devastating. Some are lucky enough to receive severance packages, but many find pink slips on their desks or lockers with little or no prior notice. Not having an emergency fund to draw from only worsens this situation, and using credit cards to pay bills can be disastrous. The loss of insurance coverage and the cost of COBRA insurance also drain the job seeker’s already limited resources. Those who are unable to find similar gainful employment for an extended period of time may not be able to recover from the lack of income in time to keep the creditors at bay.
EXCESS CREDIT. Credit companies are aggressive in selling their credit cards, mortgages, and other forms of consumer debt. Credit card bills, installment debt, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt. If the borrower cannot access funds from friends or family or otherwise obtain a debt-consolidation loan, which is usually not a realistic option, then bankruptcy is usually the inevitable alternative.
Statistics indicate that most debt-consolidation plans fail for various reasons, and usually only delay filing for most participants. Although home-equity loans can be a remedy for unsecured debt, such a loan turns unsecured debt which can be discharged in a bankruptcy proceeding, into secured debt that must be paid or the home can be lost in a foreclosure.
DIVORCE OR SEPARATION. Marital dissolutions create tremendous financial strain on both partners in several ways. First come the legal fees, which can be astronomical in some cases, followed by a division of marital assets, decree of child support and/or alimony, and finally the ongoing cost of keeping up two separate households after the split. The legal costs alone are enough to force some to file, while wage garnishments to cover back child support or alimony can strip others of the ability to pay the rest of their bills. Spouses who fail to pay the support dictated in the agreement often leave the other completely destitute. Filing for bankruptcy does not mean you are a bad person. You simply need a way to get a fresh start!
BANKRUPTCY WILL RUIN YOUR CREDIT. By the time anyone needs to file bankruptcy, their credit score is already extremely low. Bankruptcy does little to make matters worse, but rather gives you a chance to restore your credit. Without filing bankruptcy, you will still be in debt and behind on your payments, making it impossible to improve your credit score. Bankruptcy gives you a chance to start over from scratch.
YOU WON’T BE ABLE TO TAKE OUT A LOAN AFTER YOU FILE BANKRUPTCY. Most individuals are able to take out home loans as soon as two years after bankruptcy. After filing bankruptcy, our clients are swamped with credit offers, as creditors know that these individuals are trying to rebuild their credit and that they cannot file Chapter 7 bankruptcy again for eight years.
ALL OF YOUR DEBTS ARE DISCHARGED THROUGH BANKRUPTCY. Unfortunately, this is not always true. Tax debts and student loan debts are not dischargeable most of the time. There are some cases where you can find tax relief through bankruptcy, however, as well as relief from your student debt. Speak with a bankruptcy attorney from our firm to learn if your situation allows for these debts to be discharged in bankruptcy.
ANYONE CAN FILE FOR BANKRUPTCY. Consumers must meet certain eligibility requirements in order to file for bankruptcy. Chapter 7 bankruptcy requires you to pass the means test, and you must have sufficient disposable income in order to file for Chapter 13 reorganization bankruptcy. Bankruptcy is not for everyone, which is why you might benefit from learning about the many alternatives to bankruptcy.
Contact a Bankruptcy Lawyer in Tacoma, WA
Do not hesitate to speak with a skilled Tacoma bankruptcy lawyer about your options. Washington Fresh Start can counsel and guide you as you decide whether or not bankruptcy is right for you. Attorney Dave Yando has 30 years of experience in debt relief and bankruptcy. Our bankruptcy attorneys are more than capable of helping you pursue the most beneficial process for your financial situation. Schedule your free consultation to speak with a lawyer and get started on the path to financial freedom. Contact us today!