Common Bankruptcy Myths or Misconception and Answers Thereto:

Many persons have misinformed information on filing bankruptcy. Filing bankruptcy allows you to stop worrying about the debt and to stop your prior attempts to make all your bill payments while giving up normal and reasonable expenses like food, clothing, entertainment, shelter, utilities and  gas and vehicle repairs. Some persons have the wrong information on bankruptcy and fail to obtain the relief the bankruptcy discharge provides. If you are considering filing for bankruptcy , Bankruptcy Attorney Richard D. Granvold has the experience, the ability to educate you on your options to file, what assets you may keep or lose, and what debts are discharged so that you can make an informed decision considering the best interests of you and your family.

Some Common Myths About Bankruptcy

Myth 1: After the “new” bankruptcy law, bankruptcy filing no longer helps persons get rid of debts.  Untrue: the goals remain the same : Can you keep your equity in any assets you own and can you discharge all your debts! For the most part, nothing has changed..only the actions you must take in order to obtain those goals such as the 2 classes that Bankruptcy Attorney Richard D. Granvold will discuss with you.

Myth 2: Student Loans are not dischargeable in Bankruptcy. If you search bankruptcy websites as Richard D. Granvold has, you will see over 4 attorneys who state that Student loans are NOT dischargeable in bankruptcy! That is NOT the law and frankly malpractice for an attorney to so state as many persons may be misled by thinking they cannot ever discharge such loans. The law in fact states your student loans WILL be discharged if you prove “undue hardship”. Richard D. Granvold has represented more Plaintiff/Debtors in bankruptcy court lawsuits to discharge student loans than any attorney in Western Washington. Whereas most attorneys have never filed such a lawsuit to discharge student loans, Richard D. Granvold has met with over 100 persons to discharge such loans, provided the debtors their options and sometimes sued to discharge such loans in many cases. See the separate category of Student Loans on his web site. It takes time and money to obtain specific Student Loan Discharge Options and Richard D. Granvold has succeeded in discharging over 2 Million Dollars in student loans for his clients. See the actual results in the Student Loan portion of his website.

Myth 3: You will lose all your property. Less than 1% of Chapter 7 cases end up with an asset that the trustee can sell for the benefit of creditors. Thus, most persons who file for bankruptcy keep all of their property through federal or state exemptions.

Myth 4: You do not have to list all your creditors.  UNTRUE. You cannot choose which credit cards, which relatives, which taxes or student loans to include in filing bankruptcy. The law is simple: ALL DEBTS MUST BE LISTED. Having said that, ongoing Utility bills you are current with many persons do not list because they are caught up. However even cell phone plan can be discharged and you can proceed with a cheaper plan. Richard D. Granvold’s Letter #1 provided to all clients will have a section just on Utility bills and how you can discharge even past due electrical bills where you live now and the form needed to provide the Utility Provider. Otherwise, the law is clear: Any debt, even if not discharged like criminal fines, child support, etc..all must be listed. Period!

Myth 5: You will never get credit again. Untrue! Everyone has “credit”. The real issue is what do you do to increase your score post bankruptcy. Richard D. Granvold’s final letter to you with your discharge will remind you what to do. Furthermore, reaffirmation agreements during bankruptcy can increase that score if you pay on time! Many persons find credit card application mailed to them during or after filing bankruptcy. Why? The credit card companies want your business and attempt to charge you a higher interest type card. So be selective on the cards you obtain after filing bankruptcy. In a Chapter 13 in fact, many debtors have to obtain court approval to purchase a vehicle during their Chapter 13 case and in fact do so. A local bankruptcy rule in Western Washington even governs such an event!

Myth 6: Filing for bankruptcy hurts your credit for 10 years. It is your CREDIT SCORE which matters on most of your future attempts to obtain credit, not how old your bankruptcy is. Thus, what you do post – Bankruptcy is the most important thing . The fact that you filed may bes reported on your credit report for 10 years, but you can increase your score right away if you want . Many clients have contacted Richard D. Granvold after their cases to obtain copies of the pleadings filed which either are lost, in storage or ex-spouse has, etc.. The reason they are asking for them is that they are purchasing or refinancing a home, etc. So start on your credit score right away post-bankruptcy.

Myth 7: If you are married, both spouses have to file. Not true. Noone needs another persons permission to file bankruptcy. Sometimes there are reasons not to file for one spouse such as they have assets owned pre-marriage, or that spouse has already filed recently, or that spouse lives elsewhere, or simply the spouse does not want to file! There may be reasons though where it is an advantage for both spouses to file also. The amount of exemptions may increase substantially. Even if one spouse does not file, the discharge by one spouse may discharge the marital community debt also. Bankruptcy Attorney Richard D. Granvold can answer those complicated questions for you.

Myth 8: It is hard to file bankruptcy. Bankruptcy can seem complex, but with the help of an experienced attorney filing for bankruptcy is a fairly fast and simple process. Many clients bring all required documents back in one day and Richard D. Granvold will complete your case withing 1 or 2 days of receipt of the required documents and fees; his assistance of helping over 8,000 persons filing bankruptcy makes it easier for you.

Myth 9: Creditors will still harass you if you file for bankruptcy. When your bankruptcy is filed, the court sends notices to your creditors either electronically or by mail and thus when they receive such notice with your name and social security number, they are able to enter those facts appropriately so that they stop contacting you or harass you or do anything to collect on the debt. Richard D. Granvold had to recently sue a creditor in a Chapter 13 case who would not stop their communications with the debtors resulting in a settlement with that creditor who had to pay all the attorney fees also. Always write down who you speak to and their phone number and if any repeated violations occur, contact Richard D. Granvold. However, most creditors will cease all activity as they know the law prohibits such communications. Some communications such as notices of repossession, or notices of foreclosures, or attempts to obtain reaffirmations may not violate the stay provisions or be sent after obtaining relief from such stay provisions and are meant for notice purposes only. If any doubt, contact Richard D. Granvold on your rights and actions to take.

Myth 10: Income taxes are not dischargeable in bankruptcy. Absent fraud, all income taxes can be discharged normally if you filed a tax return IF you wait long enough after filing it with the IRS before filing bankruptcy. There are several rules that govern that attempt to discharge including the taxes have to be over three years old and there are other requirements. Richard D. Granvold has obtained a bankruptcy-tax attorney (Kenneth C. Weil) for that unique, special area of the law and has used that attorney’s advice for his clients since 1990! That attorney calls the form he prepares for me the “Granvold Form”, and, he now uses that form for all of his clients. If you have income taxes past due of significant amounts, you are strongly suggested to employ Richard D. Granvold so that that tax advice can then be obtained-then you will know exactly how long , if at all, do you have to wait to file bankruptcy to discharge each of those years of income taxes! Do not take any actions with the IRS until you have employed such tax attorney through Richard D. Granvold and do so forthwith. Ken Weil’s website is weilkc@weilkc.com .

Myth 15: You can only file for bankruptcy once. Not true: A person can file for Chapter 7 once every eight years after the petition filing date. But a person can file a Chapter 13 almost anytime. However, if a Chapter 13 is filed less than 4 years after filing the Chapter 7, different laws govern than if 4 years has passed! Attorney Richard D. Granvold has file chapter 13 cases for clients right after a chapter 7 when it is advantageous for the debtors to do so for different legal reasons also.

Myth 16: Everyone will know you filed for bankruptcy. While bankruptcy is a public record, it is not published in newspapers unless you are some newsworthy person. A person can inspect at the bankruptcy court the names of persons who have filed in this jurisdiction but the general public does not know.

Myth #17: You will lose secured Assets or make keep them without paying: What is the difference between a secured debt and unsecured debt? If you still possess the property that your purchased from a creditor with a “security agreement”, then that security agreement provides the creditor certain rights concerning repayment of the debt or ability to repossess that asset. Common secured assets are houses, vehicles, major appliances normally always are such as washers, dryers, sound systems, tractors, lawn mowers, jewelry, furniture. See the article in Richard D. Granvold’s website herein on Security Agreements. In a Chapter 13 your plan must provide for surrender or payment of secured assets and he will discuss with you your options as the law differs depending on when the asset was purchased, whether it is a vehicle or not, and other rules. If you no longer have the asset , it is NOT secured as to your case. Unsecured claims can only sue if you owe money, and have nothing to repossess such as a credit card! Many secured creditors may not attempt to enforce their security interests because of the costs associated with attempting to do so on the smaller “ticket items”.

Myth: #18 You will never be able to own anything again. After a bankruptcy you can buy, own and sell property just as you could before. Different rules govern when a bank can resell your mortgage so buying a house without a private lender may take 2 or more years, but it depends on what you do concerning your credit score post bankruptcy. You can purchase a vehicle the next day after discharge or even during your bankruptcy !