Top 15 Myths Of Bankruptcy (Unless You’re Counting) Part Two

29 Sep Top 15 Myths Of Bankruptcy (Unless You’re Counting) Part Two

6. YOU WILL NEVER GET ANOTHER JOB OR BE ABLE TO RENT AN APARTMENT
FALSE – Employers do not want like having their employees distracted from the job by harassment at work or the extra accounting caused by wage executions. Landlords want tenants who can use their salary to pay rent, not paying creditors instead.
7. IF YOU FILE BANKRUPTCY , MIGHT AS WELL MAX OUT CREDIT CARDS
FALSE – This bit of street knowledge could result in criminal charges against you. Maxing out those cards will create more problems in your bankruptcy filing and may be bad faith. Bankruptcy is meant for the honest debtor who is trying to get a fresh start.
8. YOU SHOULD DO ANYTHING TO AVOID BANKRUPTCY INCLUDING CASHING IN 401K OR RETIREMENT FUNDS
FALSE – Retirement funds are as closed to sacred money as you can get. The funds are protected and you will face taxes and penalties on retirement withdrawals by the IRS, if not repaid.
9. IMMIGRATION STATUS WILL BE AFFECTED AND YOU WILL NEVER BECOME A CITIZEN
FALSE – Filing bankruptcy is NOT a crime and will NOT affect your Green Card or application for citizenship.
10. MY NAME WILL BE PUBLISHED IN THE NEWSPAPERS IF I FILE FOR BANKRUPTCY AND EVERYONE WILL KNOW ABOUT IT.
FALSE – While it is true that the U.S. Bankruptcy Court records are public, no one cares. More than 2 million people filed for bankruptcy in 2005 (a peak year) and 2009 is looking to be close. You probably know someone who has filed for bankruptcy in the past and just don’t know it.

6. YOU WILL NEVER GET ANOTHER JOB OR BE ABLE TO RENT AN APARTMENT

FALSE – Employers do not want like having their employees distracted from the job by harassment at work or the extra accounting caused by wage executions. Landlords want tenants who can use their salary to pay rent, not paying creditors instead.

7. IF YOU FILE BANKRUPTCY , MIGHT AS WELL MAX OUT CREDIT CARDS

FALSE – This bit of street knowledge could result in criminal charges against you. Maxing out those cards will create more problems in your bankruptcy filing and may be bad faith. Bankruptcy is meant for the honest debtor who is trying to get a fresh start.

8. YOU SHOULD DO ANYTHING TO AVOID BANKRUPTCY INCLUDING CASHING IN 401K OR RETIREMENT FUNDS

FALSE – Retirement funds are as closed to sacred money as you can get. The funds are protected and you will face taxes and penalties on retirement withdrawals by the IRS, if not repaid.

9. IMMIGRATION STATUS WILL BE AFFECTED AND YOU WILL NEVER BECOME A CITIZEN

FALSE – Filing bankruptcy is NOT a crime and will NOT affect your Green Card or application for citizenship.

10. MY NAME WILL BE PUBLISHED IN THE NEWSPAPERS IF I FILE FOR BANKRUPTCY AND EVERYONE WILL KNOW ABOUT IT.

FALSE – While it is true that the U.S. Bankruptcy Court records are public, no one cares. More than 2 million people filed for bankruptcy in 2005 (a peak year) and 2009 is looking to be close. You probably know someone who has filed for bankruptcy in the past and just don’t know it.

Continue to Part Three

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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