Bankruptcy Myths

Bankruptcy Myths | Ron Lundquist Bankruptcy Lawyer - Eagan, MN

Bankruptcy myths abound, due to both the spread of misinformation from inexperienced bankruptcy lawyers and general confusion about the law. It’s true that the laws surrounding bankruptcy can seem confusing. If certain bankruptcy lawyers get it wrong, it’s no surprise that others outside of legal circles would, too!

DEBUNKING BANKRUPTCY MYTHS
I’m here to set bankruptcy law straight. With almost 20 years in bankruptcy law, I haven’t simply studied the system - I have lived it! I know how the bankruptcy process works and how the specifics of a case can require a subtle change here and there to successfully file according to Minnesota bankruptcy law. I’m not here to judge you, just to give you the information, tools, and support to regain control of your finances.

Let’s start by debunking some of the most common bankruptcy myths that I have heard:

• You have to be sued before you can file bankruptcy – FALSE. A client can file bankruptcy at any time, so long as the criteria for the type of bankruptcy are met. For instance, to file the most common type of bankruptcy (Chapter 7), we will assess your monthly budget, assets, creditor history, and transactional issues. Each of these criteria will be discussed and explained in detail during an initial consultation.


• You have to be 3 months behind on your bills before you can file bankruptcy – FALSE. As stated above, a client can file whenever he or she deems it best, so long as certain budget and debt criteria are met. I have helped many clients who were 100% current on their bills but knew their finances were going to take a hit. Your reasons for filing bankruptcy are unique to you, but you don’t have to wait for anything to file.


• You can only file bankruptcy once in your lifetime – FALSE. Repeat filings are allowed. A client can file Chapter 7 every 8 years. A client can file a Chapter 13 after a Chapter 7 four years after initially filing Chapter 7. Sometimes a client has no choice but to file multiple times, even within a few years.


• You cannot apply for new credit for 10 years – FALSE. Clients who seek credit soon after filing bankruptcy usually get it. However, rebuilding your credit after bankruptcy can be tricky. We can discuss that at your consultation or during the bankruptcy process.


• You can’t discharge medical bills in bankruptcy – FALSE. Medical bills are a major reason why clients choose to file bankruptcy. There are very few non-dischargeable debts. Nondischargeable debt that can’t be wiped out includes student loans, child support obligations, and taxes. Though, sometimes, even these can be eliminated by filing bankruptcy.


• I will lose assets – FALSE. Almost 100% of clients lose nothing. If you are concerned about losing certain assets, I will speak with you about the exemptions we can file with your case. Exemptions protect your assets.


• The Bankruptcy Court rejects most filings – FALSE. The vast majority of bankruptcy cases are not rejected. It is extremely unusual that a client must fight to file bankruptcy. I can usually tell after the initial consultation whether a client might face issues in filing. If such is the case for you, we can discuss strategies to deal with those issues.

These are just a few of the many myths I have heard over the course of my career as a bankruptcy lawyer. If you are uncertain about how bankruptcy might affect you or if you will qualify, don’t hesitate to call me. I will answer every question honestly and thoroughly so that there are no surprises for you along the path toward financial freedom.

I am recognized as a debt relief agency, and provide bankruptcy relief using the laws of the State or Minnesota and the United States Bankruptcy Code.

Get started by calling 651-454-0007!