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A Few Myths About Bankruptcy

The Internet is a wonderful resource for information. So is your neighbor, your best friend and your co-worker. But not all of the information you may encounter is true. When it comes to Bankruptcy, it is important that you have accurate, true and complete information at your fingertips. Here are some common Myths you may have heard about the subject of Bankruptcy:

Myth: The changes to the Bankruptcy Code in 2005 virtually eliminated bankruptcy as an option for most people .

False. The revisions to the Bankruptcy Code have not reduced the bankruptcy filings. In fact, bankruptcy filings continue to be at record numbers, which reflects Congressional intent that citizens be given the opportunity for a Fresh Financial Start.

Myth: You can decide what assets and which debts to include in a personal bankruptcy.

False. It is required that all assets and all debts are listed in your bankruptcy case. This is important, since you are only released from debts that you list--you are not released from debts you fail to list, either intentionally or inadvertently. Also, there is a modest allowance for property that you can retain in your bankruptcy case without strings attached. But even if you own property exceeding your personal allowance, you can make arrangements to buy it back from the Bankruptcy Trustee.

Myth: It is incredibly difficult to file a bankruptcy case, even with a bankruptcy attorney

False. At the Law Offices of Scott W. Spradley, P.A., we are there every step of the way to assist you in completing the proper paperwork necessary to complete your case. Additionally, I personally attend the Trustee meeting with you, and will be in Court for you whenever there is a hearing in your case.

Myth: Bankruptcy will not discharge my tax obligations.

This depends on your situation. Certain older taxes can be discharged in bankruptcy. Relatively "fresh" taxes, however, may survive your bankruptcy discharge. I will personally review your tax situation with you and advise you about whether your tax debt will likely be discharged in bankruptcy, or not.

Myth: Filing Bankruptcy means I will never qualify for a loan again.

False. While we cannot advise you about the prospects of obtaining future credit or loans, I can tell you that eliminating debt through a bankruptcy discharge actually increases the credit score of many individuals who filed bankruptcy. Moreover, the combination of eliminating debt plus having an income sufficient to support a loan payment are positive factors in qualifying for a loan, despite a bankruptcy discharge.

Myth: Creditors will be even angrier at me and step up their collection calls if I file bankruptcy.

False--at least as to creditors continuing their pre-bankruptcy collection efforts. The filing of a bankruptcy automatically terminates the ability of creditors to legally contact you for purposes of collecting a debt. Prohibited activity includes collection calls; collection letters; and lawsuits. In summary, filing a bankruptcy results in immediate relief for many people who have been inundated with creditor collection efforts.


The Law Offices of Scott W. Spradley, P.A. is committed to answering your questions about Personal Bankruptcy, Business Bankruptcy, General Litigation and Wills law issues in Florida.

I offer a free consultation and I’ll gladly discuss your case with you at your convenience. Contact me today to schedule an appointment.