Bankruptcy Myths

Many myths and misconceptions surround the topic bankruptcy and add confusion to what may already be an extremely stressful situation. The word “bankruptcy” can trigger an emotional response for many people and there is no doubt that bankruptcy is a very serious topic. However, many of the reasons that bankruptcy can seem so frightening is because of widespread misunderstandings. Because laws change regularly and every state, including California, has its own exemptions, speaking with a bankruptcy attorney in Los Angeles is absolutely crucial. Below, our bankruptcy attorneys challenge some common bankruptcy myths.

At Weintraub Zolkin Talerico & Selth LLP, we have a long history of representing our clients through Chapter 7, Chapter 11, and Chapter 13. Businesses, individuals, and families throughout Los Angeles turn to us for candid, practical, and insightful guidance through the legal process. Based on our decades of experience working with a wide variety of clients, we are prepared for the most challenging cases and are prepared to answer all your questions. We are also prepared to correct misunderstandings that may be preventing you from seeking help.

The Most Harmful Bankruptcy Myths

The most harmful bankruptcy myths prevent some people facing financial stress from contacting a bankruptcy attorney. We can help whenever you call us, but the sooner you contact us, the more options you may have available. The following myths may be preventing you from seeking our help:

Myth #1: My home will be taken away if I file Chapter 7.

Untrue. Provided you are current on your mortgage, the bank will not be affected. Also, if you have equity, there are exemptions to protect your homestead amount. You will not lose your home just because you file. Our Los Angeles bankruptcy attorneys will identify which assets will be protected and how we can help defend your most precious property, including your home.

Myth #2: I will have no access to credit after filing bankruptcy.

Untrue. In fact, completing the bankruptcy process can help your credit rating. By filing bankruptcy, your credit may improve compared to carrying numerous late payments, judgments, and falling behind on bills or paying the minimum for years on end. Controlling your debt and confronting it demonstrates credit worthiness.

Myth #3: I will lose my business if I file.

Untrue. Business owners have multiple options for filing bankruptcy and our business bankruptcy attorneys can discuss which is best for you. We have successfully helped many medium and small businesses survive and thrive through bankruptcy. After a candid analysis of your situation, we will determine if a reorganization is right for you.

Myth #4: You can’t discharge taxes in bankruptcy.

Untrue. Many of our clients turn to us after enduring years of crushing tax burdens. The payments they are making to the IRS or other tax collecting authority are causing them extensive stress. Many of our clients are pleasantly surprised to realize that many tax obligations can be discharged in bankruptcy. Call us at (310) 220-4147 to determine if your taxes can be discharged.

Myth #5: Individuals can’t file Chapter 11.

Untrue. If your debt or income limit exceed the requirements for Chapter 13, you can file Chapter 11. We have extensive experience with Chapter 11 for individuals and can help you determine which chapter is right for your situation.

Myth #6: Bankruptcy will ruin my life.

Untrue. In fact, bankruptcy may be a step toward a better life. While bankruptcy is always a last resort and our attorneys have many alternatives to bankruptcy that we may suggest, sometimes bankruptcy is the best option. Rather than ruining your life, bankruptcy may significantly improve your life by eliminating some of your bills, putting an end to creditor harassment, and helping you rebuild your credit.

There is no reason to struggle with your financial challenges alone. You may have business partners, friends, and family members to speak with about your finances but there is no substitute for discussing your circumstances with an experienced bankruptcy lawyer in Los Angeles.

Call Weintraub Zolkin Talerico & Selth LLP at (310) 220-4147 today for attorneys who will challenge bankruptcy myths and be your strong legal advocates through the bankruptcy process.