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Bankruptcy Myths
Most people who file bankruptcy don’t lose anything. The United States Bankruptcy Code allows states to outline property that is exempt. A Chapter 7 bankruptcy Trustee cannot take property that is exempt. Most Chapter 7 filers have very little that is not exempt. The Utah exemption code allows you to keep some equity in your home and car. In addition, almost all of your household furnishings are exempt. While everybody has property that is not exempt, the Trustee will have no interest in taking that property unless there is significant value that warrants taking the time and effort to take control of the property, sell it and distribute the funds to unsecured creditors. Chapter 13 is intended to allow you to keep your property.
Bankruptcy does have an adverse affect on your credit. Bankruptcy, however, is only one of many factors that effect your credit. Your actions after bankruptcy have a greater effect on your credit than the fact that you filed a bankruptcy.
The fact is that bankruptcy records are public records. Nevertheless, the only people that are provided official notice of the bankruptcy are the people you owe money to. Others such as your boss, friends and family members will probably not find out unless they go out of their way to find out.
The new laws went into effect on October 17, 2005. The fact is that Congress has made a few more hoops to jump through. For example, the new law requires that you complete a credit counseling session before filing and after filing you have to complete a debtor education. Each takes about an hour. In addition, you are now required to provide proof of your pay for the last 6 full months prior to filing (not counting the month of filing) and you are required to provide ALL pay stubs that you received in the 60 days before filing. (including those received in the month of filing) The truth is that for most people the only change is the monor hoops that are now required. Almost all of the same debts are dischargeable under the new law as were dischargeable under the old law. |
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