BlogCommon Misconceptions About Bankruptcy

March 25, 20220

Many of our clients have talked to friends or family members about bankruptcy before coming to us and have received a good deal of faulty information. Following is a list of common misconceptions that we see:

1. Married Person Must Both File Untrue. This seems to originate from the requirement that a person filing bankruptcy must furnish information about his/her spouse’s income. Bankruptcylaw does generally require that the spouse’s income be factored in to the Means Test, but this does not mean that both spouses must file. We frequently file bankruptcy cases that involve only one spouse or the other. If the circumstances warrant it, both spouses MAY file together.

2. You Can Never Get Credit Again Untrue. Bankruptcy certainly lowers the filer’s credit score initially, but with continued timely payments on secured debts, credit scores will quickly improve over time.

3. You Lose All Your Property In Bankruptcy Untrue. Mississippi allows bankruptcy filers to exempt $10,000.00 in personal property per person and a $75,000.00 homestead exemption. Almost all of our clients keep everything they own. The exemption amounts only count the filer’s equity in the property and not the total value of the property. For instance, if you own a car valued at $20,000.00 and owe $19,000.00 on it to the bank that financed it, you only use $1000.00 of your personal property exemption. Other personal property such as appliances, clothing, furniture etc. has a very low value and uses very little of the personal property exemption. In a case where a debtor does own property in excess of an exemption, he may utilize Chapter 13 and make deferred payments to his unsecured creditors in amount equal to the amount the exemption is exceeded.

4. You Cannot File For Bankruptcy Again After You Have Filed Untrue. Bankruptcy law does limit the frequency of the discharges you can receive. If you have received a Chapter 7 discharge in the past, you will not be eligible for another Chapter 7 discharge for 8 years and a Chapter 13 for 8 years. A person who is presently ineligible for a discharge can nevertheless file a Chapter 13 bankruptcy and receive the protections of bankruptcy for up to 60 months.

Each case is different and we’ll be glad to consult with you about your particular circumstances with a free initial consultation. Just give us a call.

Leave a Reply

Your email address will not be published. Required fields are marked *


Paul Caston Attorney SRA ref 669401. Calls may be recorded for quality and training purposes.

© 2021 Design by Rhino Web Studios.