Bankruptcy Myths – Bankruptcy Attorney

Providing Clients Debt Relief Solutions

There are many myths about about filing for bankruptcy. Some people see it as a sign of failure. But the truth is some of the most successful people in American history have filed for Chapter 7 or Chapter 13 bankruptcy. It can be a very effective solution to help those struggling with overwhelming debt regain their financial freedom. Perhaps the most unfortunate myth about filing for bankruptcy is that the recent law passed by Congress will make it impossible for you to obtain bankruptcy protection. The Bankruptcy Abuse Prevention and Consumer Protection Act was passed in 2005. Many creditors felt that bankruptcy law was being abused, and that debtors were filing bankruptcy to avoid debts that they actually could and should pay.

The most significant effect of the law is the “means test.” It prevents only a very few people from filing for Chapter 7 bankruptcy in Salt Lake City. Your income is compared with the median income of a family the same size as yours, in your state. If it is higher, you must then compare your income with your debts. If you have high income and low debts, you will probably not be allowed to file under Chapter 7. Most people will qualify, however, and Chapter 13 bankruptcy in Salt Lake City is available for most who cannot file under Chapter 7.

Other Myths

Myth: Filing for bankruptcy is admitting failure.

Truth: It is easy for even the most responsible people to fall into debt. The bankruptcy laws are federal law and society has long recognized they are in the best interest of society, the business community, and all parties. They allow debtors to get out from under debt they simply cannot pay, and allow creditors to get at least some of what they are owed. Filing for bankruptcy is frequently a wise decision and is not a sign of failure.

Myth: Filing for bankruptcy will affect my credit score forever.

Truth: Having the right Salt Lake City bankruptcy attorney on your side can make a big difference. We can tell you the steps and actions that will quickly rebuild your credit.

Myth: Bankruptcy is the last resort.

Truth: Cashing in retirement accounts, moving debt from one credit card to another, or taking out a second mortgage may not be the best options. Bankruptcy may serve you better.

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Along with a bankruptcy petition and supporting documentation, people filing for Chapter 13 bankruptcy will also need to include a preliminary repayment plan which is usually developed during credit counseling. After the creditors meeting you will attend a meeting to confirm your repayment plan. Once your repayment plan has been successfully completed, you will receive a discharge of your debts.


Before your bankruptcy petition is filed, you will need to take a means test to see if you qualify for Chapter 7 bankruptcy

A The means test measures your disposable income against that of other Utah citizens and ensures that your application for bankruptcy is not an abuse of the system.

After the creditors meeting has been completed, the trustee will identify your exempt property and your nonexempt property. Your nonexempt property may be sold at auction and the funds used to repay your creditors. If your trustee decides that none of your property can be sold, you would lose nothing.

After the funds, if any, have been distributed to your creditors, you will receive a discharge and will no longer have any personal responsibility for those debts.


It can be easy for even the most responsible person to fall into overwhelming debt. But does not have to be impossible to get out. The first step is to seek representation from a Salt Lake City bankruptcy attorney with a track record of protecting the rights of clients and looking out for their best interests. Contact our office today to discuss your bankruptcy questions with a lawyer. We are available during regular business hours and by appointment evenings and weekends. You can reach us by phone at 801-505-9679 or via e-mail.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.