Misconception #5: Bankruptcy gets rid of all debts.
Not so. Although most consumer and business debts are wiped out in bankruptcy some debts are not affected. Certain debts can't be eliminated in bankruptcy. They include child support, alimony, fines, restitution, some taxes, loans obtained by fraud, student loans, debts due to a DWI, and debts resulting from "willful and malicious" harm. Some of these can be handled effectively in a Chapter 13 bankruptcy.
Misconception #6: I can protect my property by hiding it or giving it away before I file bankruptcy.
No. It's a crime to hide property and not disclose it. It's also a crime to give property away without telling the Court in the bankruptcy papers. The Court Trustee will seek to recover any property wrongfully transferred prior to a bankruptcy filing. You could end up in jail by attempting to illegally hide or transfer property.
Misconception #7: I will lose my job if I file bankruptcy.
Not true. The bankruptcy code prohibits an employer from discriminating based on a bankruptcy filing. In nearly 13 years of helping people in bankruptcy cases, I have never even heard of someone losing a job because of a bankruptcy filing.
Misconception #8: I filed a bankruptcy before, so I can''t file again.
Incorrect. The law prohibits someone from filing a new chapter 7 bankruptcy within less than 6 years of a previous filing. Also, even within the six-year time period, a chapter 13 case may be filed. Don't hesitant to call us if you have filed a previous case. You still have options that may help.
Misconception #9: I am not allowed to have a checking account if I file bankruptcy.
Incorrect. There is no rule that stops you from keeping or opening a bank account. Most people keep the account that they had and continue to use it without interruption. Sometimes it's smart to close an existing account prior to filing bankruptcy. That's because the bank involved may be a creditor in the bankruptcy. In general, if you do not owe any money to the bank your account is at, there is no reason to close the account.
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