Bankruptcy Misconceptions

Bankruptcy is a decision based on finances-not whether or not you’re a good or honest person.

People Who File for Bankruptcy in Arizona are Bad People!

I don’t think so. People who file bankruptcy are in debt. That’s all. Your creditors want you to think that all people who file bankruptcy are worthless deadbeats sucking the system dry. That’s simply not true.

Who Files for Bankruptcy?

Your neighbors. People in every socioeconomic bracket file bankruptcy. It doesn’t matter whether you live in a mansion or an apartment.

The older population is the fastest growing bankruptcy segment. Medical debts are relentless and leave the elderly with a shortage of options. Families with single mothers or single fathers are also at great risk. Children in the household will triple the risk of filing.

It’s not the sleazy people that want to suck the economy dry that file bankruptcy. It’s the hardworking, honest people that fell into the trap of credit.

Bankruptcy is the Easy Way Out for People Who Can’t Pay Their Bills.

Creditors have wanted you to believe this since the 1800s and they’ve never been right. The credit industry has funded several “studies” to show that people are trying to skip out on their obligations, but every single one has been debunked. Several were even discredited by two financial arms of Congress, the General Accounting Office and the Congressional Budget office. Bankruptcy doesn’t cause debt at all. Bankruptcy is a result and cure for debt.

Does Bankruptcy Threaten Our Society?

Credit-card companies have pushed credit in the faces of anyone that wants more “stuff”. That means anyone from 18 and up. According to the Administrative Office of the United States Courts, consumers between the ages of 18-25 are one of the largest growing segments (next to senior citizens) of bankruptcy filers-students and other young people who lack maturity and resources to handle debt.

Credit is an amazingly profitable business and bankruptcy will continue as long as credit is around.

Honest People are Paying for the Bankrupt.

No. That is untrue. The misconception is that thousands of people ignore their obligations, therefore pushing the “honest taxpayers” to pay the debt. Creditors write off about $40 billion in debts annually. Do you really think that creditors will pass on their saving to the consumer? Highly unlikely.

I Will Lose Everything I Own if I File for Bankruptcy.

Fortunately, under Chapter 7 Arizona bankruptcy law, there exists a number of exemptions for assets of an individual.

All Unpaid Income Tax Obligations Must be Paid Because They Cannot Be Included in a Bankruptcy.

Although many kinds of taxes cannot be discharged in a bankruptcy case, income taxes can be discharged if they meet certain requirements.

It is Not Possible to Rebuild or Re-Establish Credit Much Less Buy a Home After a Bankruptcy.

On the contrary, you should be able to re-establish your credit, typicially by starting out with a secured credit card. Depending on the type of bankruptcy and type of mortgage, it is possible to buy a home within 2-4 years from the date of discharge.

Call 480-755-8000 to speak with our Arizona bankruptcy attorney today for immediate help.