- Help for Artists
There are many myths floating around about what a bankruptcy does and does not do. Feel free to ask us anything. We will always provide a straight forward and honest answer. Our goal is to help you, even if that means dissuading you from filing a bankruptcy that would not be in your best interest.
“Filing a bankruptcy petition halts foreclosures and trustee sales on real property.”
True. Filing either a Chapter 7 or Chapter 13 will temporarily halt foreclosure on a debtor’s real estate.
“Filing a bankruptcy is a sure fire way to save my house from foreclosure.”
Myth. Filing a Chapter 7 when you are behind on your mortgage payments will not prevent the bank from ultimately foreclosing on your property. It will only provide temporary relief from foreclosure. It is, however, possible to save a house from foreclosure even if you are behind in payments by filing a Chapter 13. Even then, you must still repay all the arrearages and must make every regular mortgage payment that comes due after filing or else the bank could still foreclose.
“Filing a bankruptcy stops creditors from calling you, writing you collection letters, and bringing lawsuits against you.”
True. In most cases, the automatic stay imposed by the filing of a bankruptcy ends collection efforts by unsecured creditors. In most cases, that means the calls, letters, and lawsuits will end completely.
“Filing a bankruptcy will prevent repossession of your automobile.”
Partially True. Filing a Chapter 7 cannot prevent repossession of your cars if you are behind in payments (it may stay repossession temporarily). You will either have to work with your lender or your lender will ultimately be able to repossess your car. As with real property, the filing of a Chapter 13 can enable you to keep a car even if you are behind on payments.
“When I file Chapter 7, the Court will take everything I own.”
Myth. In a Chapter 7, the Trustee will not come to your house and take all your belongings. You are entitled to keep basic living items and claim exemptions in your cars and home. The Trustee may ask you to turn over items that he/she can sell, such as motorcycles, jewelry, stocks, cash, etc. Most Trustees, however, will let you buy these items back from them if you really want to keep them. There are 100% legal ways to protect your assets in a bankruptcy. We advise all of our clients on the best strategies for their situation.
“I do not need an attorney to file bankruptcy. My neighbor [Sally/Bob] filed last year and they paid $200 to a document preparation company with no problems.”
True. You do not need an attorney to file bankruptcy. You also do not need a Dentist to pull a tooth or a Doctor to take your blood pressure. If you want to ensure that it is done right, however, an attorney is essential. Be wary of low-cost bankruptcy services, paralegals operating without attorneys, and document preparation services. We hear horror stories from people who tried using a low-cost service only to have their case dismissed or mishandled. Cleaning up the mess can be very time consuming.