Many people have received misleading information about the bankruptcy process. We hope that by providing you with real results such as those gained our past and current clients, we can help you determine whether bankruptcy, debt negotiation or litigation is the proper course of action in your particular case.

1. "I will lose everything I have."

Nothing could be further from the truth. The fact is most people who file for bankruptcy don't lose anything.

First, while laws vary from state to state, every state has exemptions that protect certain kinds of property. For example, there are exemptions to protect such things as your house, your car, your household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, wages, etc. In those situations where you have more property than can be protected by available exemptions, filing under Chapter 13 allows you to keep this property by paying a portion of your debt through a Chapter 13 plan.

2. "I will never be able to own anything or have good credit again."

Most of our clients are back to having good credit within a year after the bankruptcy. How you handle credit after bankruptcy is entirely up to you, but if you follow our advice, chances are you will have good credit sooner rather than later, and most likely much sooner than you think.

The fact is, since you no longer have the majority of your old debt, you have the increased ability to repay new debt - your income is freed up to pay the new creditor, who is the one you're seeking to get the credit from.

Over time, if you are careful, keep paying your bills, and do things that will put good marks on your credit report, the quality of your credit will get better and better. Generally, in our experience, most clients are able to re-establish good credit again in the year following the bankruptcy, sufficient to finance a new car loan or even a new home mortgage.

Most clients are surprised to learn that filing for bankruptcy can actually help them re-build their credit. Bankruptcy gets rid of debt, and getting rid of debt puts you in a better position to handle new credit. Therefore, bankruptcy can often be the first step in the process of re-building your credit.

3. "Only deadbeats file for bankruptcy."

Not true. Most of the people who file for bankruptcy are good, honest, hard-working people . . . just like you and me. They file as a last resort after months or years struggling to pay the bills that were left over from some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or some family emergency. Or it could have been because they honestly and mistakenly fell into debt at a young age before they knew better, before they knew anything about budgeting or how to manage money.

There's a reason over 2 million Americans filed for bankruptcy protection last year . . . and it's not because they're bad people. Lots of good, honest, hard-working people fall on hard times. Let's face it, life can be brutal, and sometimes the money's just not there. The bankruptcy system was created with this in mind - to make sure you have a way, if need be, to get free from the burden of debt, so that you and your family can have a second chance at a "fresh start."

4. "I can't get rid of taxes through bankruptcy.

Income taxes that are more than 3 years old may be discharged. There are strictly interpreted exceptions to this rule and it is important for you to meet with an attorney to determine if your taxes can be dischargeable in a bankruptcy.

5. "I can pick and choose which debts and property to list in my bankruptcy."

Under the law, when you file for bankruptcy you have to list all your property and all your debts. Most people want to leave out a debt because it is their intent to keep paying on it. The good news is that you can achieve that goal, even though you have to list the debt. If you want to keep paying on a debt after bankruptcy you can. After bankruptcy you can go back and pay anybody you want. A formal reaffirmation may also be considered, which essentially places you in the same position vis-à-vis the creditor as you were before you filed bankruptcy.

In fact, after you file bankruptcy there are some debts you have to keep paying on. For instance, if you have a car or house loan, even though you list the debt in your bankruptcy, if you want to keep the car or house you have to keep paying on the debt. As long as you stay current on the loan and keep the property insured you are protected under the law and you get to keep the property.