Bankruptcy Myths

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Learn the Truth about Filing for Bankruptcy in Naperville

Though bankruptcy can be an incredible form of debt relief for many people, it carries a negative stigma that prevents many people from considering it is a viable option. At Lynch Law LLC, we want to educate potential clients on the truths about filing and help them see the benefits of the bankruptcy process.

The following are some of the most common misconceptions about bankruptcy and the real truth:

Call (630) 960-4700 now to discuss your situation during a free consultation.

Everyone will know I've filed for bankruptcy.

Not necessarily true. When your bankruptcy is filed, the court system will index your filing by your Social Security number. The filing is published in a local legal paper. Most likely the only people who will know of the filing will be your creditors.

All my debts will be wiped out in Chapter 7 bankruptcy

Although the vast majority of your debt will be wiped out, certain debt cannot be discharged. For example, any debt incurred by fraud, child support, alimony, certain taxes, and student loans cannot be discharged.

I'll have to give everything I have to the bankruptcy court.

Not true. The purpose of bankruptcy is to help you obtain a fresh start. The court protects certain assets from the bankruptcy court and your creditors. In Illinois, this includes some home equity, vehicle equity, and personal property. Your retirement accounts are fully protected and no one can take them from you.

I'll never get a credit card again.

Not true. You will most likely receive offers for credit cards after you receive your discharge. Also, you will be able to purchase a new home within a year or two from the discharge.

Bankruptcy will permanently ruin my credit.

Our clients are often surprised at how soon they are able to rebuild their credit. If you're careful, your credit score will climb quickly after you file your bankruptcy. Shortly after your discharge, you will be able to purchase a new car. You can even purchase a home with 18 months of discharge.

Both my spouse and I have to file for bankruptcy.

The only person who needs to file is the party who owes the debt. However, in our experience, the debt is usually incurred by both the husband and wife, which is why we usually file our cases jointly.

Only irresponsible people file for bankruptcy.

Almost all our clients file for bankruptcy due to circumstances beyond their control, such as job loss, prolonged illness, or divorce. Our firm is usually the last resort for people to be able to resume a normal life without constant financial struggles.

Do I have to include all my creditors?

There is no picking and choosing in a bankruptcy filing. You will be discharged of all dischargeable debts. If you have certain creditors that you wish to repay, you can voluntary pay them but you are not under any legal obligation to do so.

RS debt is not wiped out through bankruptcy.

This is not true, but as with all things related to the IRS, it is difficult and very complex. A bankruptcy filing can provide relief from the IRS and the IRS must abide by the bankruptcy court. This is one area where an experienced attorney can assist you to determine whether back taxes are dischargeable.

I can only file bankruptcy once.

The Chapter 7 Bankruptcy Code only allows an individual to receive a discharge once every eight years. In a Chapter 13, you can file for relief from your creditors but the time period between filings will determine if you will receive a discharge.

I can run up the balance on all my credit cards.

No. The bankruptcy rule states that any use of credit within 90 days of filing is suspect. Most likely, any charges within the 90 days will be discharged.

Filing for bankruptcy is difficult.

Filing for bankruptcy should not be undertaken without the help of an experienced bankruptcy attorney because the process is difficult and has many pitfalls. One mistake and your debt could be determined to be non-dischargeable. We do not recommend filing for bankruptcy by yourself.

Learn more about bankruptcy and how our Naperville bankruptcy lawyers can help you break free from debt and get a fresh start. Call us at (630) 960-4700 today.


"Roseanne is the best. My husband and I went with a cheap bankruptcy attorney to save money. BIG mistake. We ended up with an adversary hearing that our bankruptcy attorney couldn't handle. So after ..."

- Anonymous Client

"Just a note to say thank you for the legal advice you gave me last week. Before I came to see you, I was scared to face my problems, but today I opened a checking account and will go to the Social ..."

- Mrs. K.

"This extra special note sent to you today holds more appreciation than any words can say. Over 30 years ago, I found myself in a career helping others in need. I never expected to be in need myself ..."

- Mrs. J.

"Deciding to file bankruptcy and going through the process of foreclosure on our home was not something my husband and I ever thought we would have to do. On our initial visit with John, he explained ..."

- Anonymous Client

"I am extremely pleased with the service they provided: from giving me advice on how to prepare, to working with creditors, and finally to handling the legal aspects of the bankruptcy itself. They took ..."

- Mike


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