Are you considering bankruptcy as a way to alleviate substantial debt? If you are, then you probably have a number of questions and concerns for an Orange County NY bankruptcy lawyer. These questions can range from, “should I file for bankruptcy?” to “what do I need to give up during bankruptcy?”

As you look for answers to these questions, you may stumble upon a lot of misinformation about bankruptcy. There are many myths about the bankruptcy process and its outcomes. Our team at Simon Haysom, LLC dispels five of these myths right now.

Myth #1: You Will Lose Your House

Many bankruptcy clients are concerned that filing for personal bankruptcy under Chapter 7 or Chapter 13 means losing everything. However, this isn’t the case. In New York, all of your assets become part of the bankruptcy estate, which is managed by a bankruptcy trustee, but the trustee can’t sell all of these assets to repay your debts.

Certain assets are exempt from sale and you will keep them during and after bankruptcy. State law determines the exact assets that are protected as exempt property. Under New York law, exempt assets include your residential home up to $82,775 in value, savings and savings and loan accounts up to $600, and certain personal property.

An Orange County NY bankruptcy lawyer can help you identify other property in your bankruptcy estate that will be exempt.

Myth #2: You Can Only File Once for Bankruptcy 

The federal bankruptcy code does not provide a specific limit on the number of times you can file for bankruptcy. In theory, an individual can file for personal bankruptcy two, three, or even four times. However, the U.S. Bankruptcy Code does delineate how soon after filing for bankruptcy that you can file again.

After discharge of Chapter 7 bankruptcy, you must wait eight years from the date of a previous bankruptcy to file for Chapter 7 bankruptcy again and four years before filing for Chapter 13 bankruptcy. Following a Chapter 13 bankruptcy, the timeframe is six years before you can file for Chapter 7 bankruptcy and two years before filing Chapter 13 bankruptcy again. In all instances, your earlier bankruptcy must be fully discharged before you can file again, and you must have paid all your unsecured debt in a Chapter 13 bankruptcy to be eligible to file again.

Do you still have questions regarding the cooling off period between bankruptcy filings? An Orange County NY bankruptcy lawyer can assess your specific circumstances to determine eligibility to file for a subsequent bankruptcy

Myth #3: Bankruptcy Is a Personal Failing

Filing for bankruptcy is a difficult decision. Often, clients approach our office at Simon Haysom, LLC with concerns that bankruptcy is a sign of personal failing or defeat. As a top Orange County NY bankruptcy lawyer, our legal team certainly doesn’t regard bankruptcy and its outcome as a failure. Rather, bankruptcy can be and should be, an opportunity to reclaim your financial independence and establish a better financial future. This mindset about bankruptcy leads us directly to the next myth about filing for personal bankruptcy in NY.

Myth #4: Bankruptcy Will Ruin Your Financial Future

People find themselves in substantial debt for a variety of reasons. As an Orange County NY bankruptcy lawyer and law firm, we’ve heard clients tell stories of injury, job loss, overwhelming mortgage payments, and bad financial habits at a young age. Resolving these reasons for debt and starting with a clean slate through bankruptcy can propel you to a better financial future.

Myth #5: You Will Never Be Approved for a Credit Card

As discussed, filing for bankruptcy in NY isn’t the end of your financial stability – in fact, it may be the start of good financial habits and circumstances. Yet, bankruptcy isn’t a decision to make lightly. There are ramifications for your credit score, credit history, and ownership of assets and property, but repercussions should be temporary.

Chapter 7 bankruptcy only appears on your credit report for 10 years and Chapter 13 bankruptcy is only reported for 13 years after discharge. After this timeframe, a credit card company, lender, or other creditors will not see bankruptcy as a hurdle to approving your application. As well, there are some companies offering small loans and set credit limits to individuals that filed for bankruptcy more recently.

Talk with an Orange County NY Bankruptcy Lawyer

These are only five of the myths around bankruptcy in NY. If you have other questions, concerns, or confusion about filing for bankruptcy or whether to file at all, then you should talk with an Orange County NY bankruptcy lawyer. Our team at Simon Haysom, LLC is ready and waiting to assist you with bankruptcy or foreclosure questions in NY. Simply call 845-294-3596.