Five Things “They” Don’t Want You to Know About Bankruptcy

There is a lot of misinformation about bankruptcy.  Some of it is intentionality spread by people with an agenda to keep their customers from filing for relief.  Here are five things the established, big creditors do not want you to know about the bankruptcy process:
It’s relatively confidential.
Very few people will know that you filed.  Your family, friends, and employer will usually not know. Most local newspapers no longer publish any list or record of bankruptcy filings.  Outside of our office, almost no one will know about your bankruptcy case.
You are eligible.  
The biggest myth perpetuated after the 2006 bankruptcy reform was that people could not file for bankruptcy anymore.  The rule changes limited who could file for a Chapter 7 based on income, but this was not really new.  Even under the old rules, high-income earners were barred from filing for a straight bankruptcy.  For most people, the changes did not affect them. What they did do was more closely define a so-called “abuse” of the process.  In short: If you have not filed for Chapter 7 in the last eight years, then you are most likely eligible to do so.
Chapter 13, known as reorganization, is available to EVERYONE, regardless of income. You will have to make some payments based on your income and expenses.  These are determined by a formula approved the court.  Chapter 13 is there for everyone. Even if you have done a 7 or a 13 filing recently, you can file again.  The only exception is if a bankruptcy court has specifically determined you have filed too many cases and places a specific time limit before you can seek relief again.
It will save your home and car.
Another lie perpetuated by the lending industry is that a bankruptcy filing will cost you your home or car.  A Chapter 13 filing will allow you to catch up on missed payments and get your life back on track.  Right up to the date of a foreclosure, a Chapter 13 filing can stop a sheriff’s sale and get you back in the game with home and car payments.  We don’t recommend you wait until near the end.  Stopping a sheriff’s sale at the last minute takes an actual filing. That takes time and is hard to pull off in a pinch – and may cost you more.
Chapter 7 cases rarely involve losing a home a car.  The state law lets you protect you equity in your property with the homestead and vehicle exemptions.  The equity in a home or car almost never exceeds the amount of the exemption allowance.  In the rare case where it does, there are still other options and pre-planning bankruptcy planning options that can reduce or eliminate any potential hit.
  
Bankruptcy is nothing to be ashamed of…and will usually improve your credit.
The credit industry makes people feel bad about even thinking about bankruptcy.  Many famous and now richpeople have filed for bankruptcy protection.  Many well known corporations have been in bankruptcy at one time or another and have emerged better than before.  Our country’s founders actually included bankruptcy protection in the U.S. Constitution. Many scholars say the roots of the bankruptcy system can be found in the Bible in the tradition of Jubilee Years when debts were forgiven (Leviticus 25:8-13).
Rather than a bad mark, most people actually get an increase in credit standing following bankruptcy, because their debt has been forgiven.  Contrary to popular belief, the majority of our clients have a double to triple-digit raise in their FICA and other credit scores.
Look at this list–Many of these people were able to achieve great success after they received debt relief.  Are you next?
POLITICIANS
1.   Abraham Lincoln – filed several times, due to business failures
2.   Thomas Jefferson – filed several times, including after leaving office, due to large debt
3.   Ulysses S. Grant – 18th US President – filed in 1884 after leaving office
4.   Daniel Webster – US Secretary of State – 1841
5.   George McGovern – US Senator – filed in 1991 after his inn went out of business
6.   John Connally – former Texas Governor and Treasury Secretary – filed Chapter 11 in 1987
7.   William McKinley – 25th US President
8.   J. Fife Symington – Governor of Arizona – filed in 1995 while still in office
FAMOUS PEOPLE
  1.   Walt Disney – filed after a company owing him money filed bankruptcy
  2.   Henry Ford – Founder of Ford Motor Company
  3.   William Durant – Founder of General Motors
  4.   Larry King – filed in 1971 and 1978
  5.   Donald Trump – filed several bankruptcies
  6.   P. T. Barnum – Founder of Barnum & Bailey Circus
  7.   H.J. Heinz – Founder of the H.J. Heinz Ketchup Company
  8.   Mark Twain (Samuel Clemens) – filed in 1894, due to failed investments
  9.   Oscar Wilde – acclaimed poet and author
10.   William Fox – Founder of 20th Century Fox Film Corporation
11.   Milton Hershey – Founder of Hershey’s Chocolate
12.   Samuel Clemens (Mark Twain): American author of Huckleberry Finn, Tom Sawyer,         and other classics
CELEBRITIES
  1.  Burt Reynolds – filed Chapter 11 in 1996, after owing more than $8 million in debts
  2.  Lorraine Bracco – filed after long custody battle
  3.  Mickey Rooney – 1986 filing – first bankruptcy was in 1962
  4.  Kim Basinger – filed due to $8 million judgment after backing out of a movie
  5.  Jerry Lewis – filed in the 70’s after losing stage bookings
  6.  Gary Coleman – 1999 bankruptcy
  7.  Redd Foxx –filed Chapter 11 after owing $ millions to IRS
  8.  Mike Tyson – filed after foolishly blowing $300 million
  9.  Morton Downey, Jr. – filed 5 bankruptcies
10.  Larry King – filed in 1971 and again in 1978
11.  Gloria Vanderbilt – 1938 bankruptcy
12.  John Wayne
13.  Toni Braxton – filed in 1998
14.  Francis Ford Coppola – filed in 1999
15.  David Crosby – filed in 1985
16.  Mick Fleetwood – filed in 1984
17.  Dorothy Hamill – filed in 1996
18.  Marvin Gaye – filed in the 70’s
19.  M. C. Hammer – filed in 1996
20.  Merle Haggard – filed in 1993
21.  Chaka Kahn
22.  Jackie Mason – filed in 1983 after bad investments
23.  Ted Nugent
24.  Tom Petty – filed in 1979
25.  Debbie Rooney – filed in 1962
26.  Anna Nicole Smith
27.  Cindy Lauper – filed in 1981
28.  Latoya Jackson – filed in 1995
29.  Wayne Newton – filed in 1992
COMPANIES
1.    7-11 – the best-known convenience store operation in America
2.    Days Inn – One of the best-known hotel chains in the business
3.    Greyhound Bus Lines – the only U.S. bus company with regular nationwide service
4.    ToysRUs – the second largest toy retailer in the U.S.
5.    Macy’s – the most famous department store of all. What other store has its own parade?
6.    General Motors – GM’s North American unit reported and operating profit of $1.41 billion in the first quarter of 2013!

By: Greg Gouner

May we help you with a legal situation? To schedule a private consultation, call the Gouner Law Office at 225-293-6200 or toll free 800-404-1921You can also fill out our contact form.

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