Bankruptcy Myths

What the Credit Card Companies Want You to Believe

Over the past several years, banks, private lenders and credit card companies have put out a lot of false information about bankruptcy. At Burns & Hansen, P.A., we talk to people every day who need real answers about getting out of debt but are burdened with false information, half-truths and outright myths about what their life will be like if they file Chapter 7 or Chapter 13 bankruptcy.

Free initial discussion • Keep Your House and Car • Stop Collections Calls

We would like to address some of the prevalent myths and provide some straight answers about what to expect as you go through the bankruptcy process and what you can expect after your debts are discharged. Our firm has helped many people get a fresh start from their credit card debt and other monthly loan payments. We can help you keep your house, your car and protect other assets through the process, too.

We expect you to have some tough questions about bankruptcy, home loan workouts and other debt relief that we cannot possibly answer on this page. The more you know, the more you will understand why millions of people turn to licensed bankruptcy attorneys for personal legal representation to get out of debt.

Contact us to arrange a free initial discussion with one of our lawyers. to have all of your questions and concerns answered. From our offices in Minneapolis, we represent clients in bankruptcy courts throughout Minnesota.

Myth #1: The new bankruptcy laws have made it impossible to discharge my debt through Chapter 7.

Fact: Every filer must now take a bankruptcy means test to determine the ratio of their debt to income. While it is true that some people must file for a court-supervised debt restructuring plan under Chapter 13, many people still qualify to eliminate their unsecured debt through Chapter 7. An experienced lawyer will help you apply the means test in the way that offers the best legal advantage.

Myth #2: You will lose all property and assets if you file.

Fact: The U.S. Bankruptcy Code includes provisions for keeping your house, your car and other property assets, as long as you reaffirm that you are willing to continue making timely payments according to the terms of the loan agreement.

Myth #3: You will never get another mortgage, car or personal loan again.

Fact: There are ways to start rebuilding your credit immediately. One of the provisions of the new bankruptcy law is that you will be required to complete a credit counseling course. In the course, you will learn effective ways to show creditors that you are a better credit risk now than when you were weighed down with debt. Many people start qualifying for some types of loans within a year or two after discharging their debts.

Myth #4: Bankruptcy is so expensive it is not worth the additional cost.

Fact: Hiring an experienced attorney to represent you is actually more cost-effective than contracting with a debt consolidation or loan modification company. Burns & Hansen, P.A. provides a free initial discussion and offers affordable fees. We will even talk to you about a payment plan that makes sense.

Myth #5. You cannot discharge government debt, such as back taxes.

Fact: While some government-backed debt, such as student loans, cannot be eliminated through Chapter 7, taxes can often be discharged under certain circumstances. If you file Chapter 13, all debt, including student loans, can be consolidated and restructured in an affordable, court-supervised repayment plan that can save you thousands of dollars in interest and fees.

Contact us with more questions. Start looking forward to a better tomorrow.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.