Unfortunately there are many myths concerning filing bankruptcy that are often passed along by well meaning but misinformed individuals and loved ones. Here are a few of the more common misbeliefs or tricks clients have told our law firm.
- You are only able to file bankruptcy one time. This is untrue. U.S. Bankruptcy Code enables an individual to file a Chapter 7 bankruptcy eight years after discharge, but there are some restrictions and you should consult an attorney. You may also file a Chapter 13 bankruptcy following a Chapter 7 bankruptcy discharge but you should consult an attorney to discuss any limitations or restrictions.
- If property is in your name but someone else has possession or makes the payments, the asset is protected. Again, this is untrue. As long as your name is on a title or deed, that property may be seized by the trustee if there is excess equity or require that you buyback/repayment of the excess equity.
- By law, the lender or lien holder or trustee cannot take my car. No, there is no such law and you car may even be seized at the bankruptcy hearing if there is excessive equity in the vehicle(s).
- My savings are protected from being seized. No and there is a good chance a debtor or trustee will.
- My tax refund check is safe from garnishment. No, you may have your tax refund seized.
- Mutual funds are safe from seizure or levy! Your mutual fund may indeed be seized unless the unless the mutual fund is a part of an IRA or under 401, 403, 408 or 457 of the IRS Code.
- I will just have a friend or family member hold my valuables to prevent seizure. By law you are to disclose (under oath) if you have transferred any property to another individual within one year or filing for bankruptcy. Bankruptcy Fraud is a very serious crime with serious punishment for all involved in the unscrupulous transfer. This includes cash money as well.
- I am on a deed in case of death. The property is safe since I do not live there. As long as you are listed on the deed, the trustee can sell the property.
- If I file bankruptcy, I will be able to keep my car and house for free. This is completely false.
- Let’s not tell the trustee about expensive property, gifts or jewelry that we own. Do not hide any assets. If you or your spouse are intending to hide assets you are breaking the law and do not contact us.
We hope that these common misbeliefs about filing bankruptcy have helped you.
A Christian Firm Committed to You and Your Family
Free bankruptcy consultation:
We are a Christian law practice, and we genuinely care about the clients we represent. We bring a compassionate and non-judgmental approach to legal service. Kansas City bankruptcy lawyer Weston R. Moore is dedicated to protecting your interests and helping you obtain a just outcome in your case. If you need to speak with an attorney, we are pleased to offer a free consultation. To contact our firm, call 913-782-7075, or contact us by e-mail.