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Bankruptcy can be considered a taboo subject because of the fears and misconceptions about bankruptcy. But sometimes people need a helping hand, and bankruptcy may be right for them. The good news is these negative stereotypes about bankruptcy are usually not true. We’ll discuss some common misconceptions of bankrutpcy and the truth regarding these misconceptions. You’ll be suprised at how forgiving the bankruptcy process can be!
1. Bankruptcy Permanently Kills Your Credit: Bankruptcy will never completely kill your credit. A bankruptcy remains on your credit report for 7-10 years, so you can expect limited access during those years, but it is not permanent. Most people even receive credit card offers right after their successful bankruptcy discharge. Usually, a year after a successful bankruptcy discharge, your credit will even go up. This is based on multiple factors. These factors are capacity, payment history, and your debt to income ratio. After bankruptcy, all three of these factors are improved. As soon as you go and get a new credit card, you now have a large capacity, all your late payments have been wiped off your credit, and your debt to income ratio is much improved.
2. Bankruptcy Discharges All Debt: This is not true. Chapter 7 bankruptcy can discharge most unsecured debts like personal loans, utility bills, credit card charges, and medical bills. Chapter 7 may be able to even discharge secured debts under certain circumstances. Debts that can not be discharged in bankruptcy are child support, spousal support, student loans, and more.
3. I Can Incur Debt Right Before I File For Bankruptcy: You can not. 90 days before you file for bankruptcy, you are presumed to be insolvent. This means you are presumed to be unable to pay all debts owed. If you are maxing out credit cards right before filing for bankruptcy, this can cause major problems when you finally go to file. This is because it will look like you intend to defraud your creditors.
4. You’ll Lose Everything In Bankruptcy: This is far from the truth. Most property in a bankruptcy is exempt. In a bankruptcy, your home, vehicle, and clothes are exempt. Usually, creditors are not interested in the items that aren’t exempt like your air fryer or flat screen tv. So most likely, you’ll be able to keep majority of the items you own.
5. Bankruptcy Filers Are Financially Irresponsible: This is false. No one who filed for bankruptcy wanted to go through a global pandemic. No one intended to lose their jobs. No one intended to become severely ill and rack up thousands in medical bills. Filing bankruptcy should never be a shameful situation. Bad things happen to everyone and not everyone has the funds to pay for everything.
For more bankruptcy myths debunked, click here!
 
The post Bankruptcy Misconceptions & Truths appeared first on Allmand Law Firm, PLLC.

In May 2021, we reported that Real Housewives of Beverly Hills star, Erika Jayne may be brought in to her estranged husbands bankruptcy case. Now, E! News reports that Jayne is being sued for $25 million by Tom Girardi’s bankruptcy trustee, Elissa Miller. This lawsuits stems from Jayne alledgedly using the funds from Girardi’s company for her extravagant lifestyle.
Erika Jayne allegedly received jewelry and other various luxuries that were purchased using funds from Girardi’s company, Girardi Keese. Erika has stated that due to her not receiving the payments directly from the Girardi Keese comapany, she is not liable and therefore should not have to pay the $25 million back. Per her lawsuit, Jayne charged $14 million on her credit card and another $11 million to shopping vendors. None of these payments made to Jayne from the Girardi Keese company were legitimite firm expenses, but instead used for the sole purpose of Jayne’s lavish lifestyle.
From The Article:

“Even though Erika contends ‘she did not know her husband was maintaining a debt,’ the trustee feels ‘it would be a miscarriage of justice’ if the reality star was allowed to ‘simply walk completely free’ while owing more than $25 million to the estate, according to the filing. ‘Erika signed all of her tax returns, numerous credit card slips, and was well aware of the money she spent on the Debtor’s credit cards and the Debtor’s payment of her personal expenses,’ Miller argues. ‘Her feigned willful blindness and ostrich approach to these expenditures will do absolutely nothing to limit her liability.'”

Erika’s attorney, Evan Borges, claims Erika did not deceive anyone. He claims that “the trustee and her legal team are ‘jumping to conclusions without a full investigation,’ as well as ‘bullying and blaming Erika for actions taken by Girardi Keese for which Erika does not have legal liability.'”
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The post Tom Girardi’s Bankruptcy Trustee Sues Erika Jayne For $25 Million appeared first on Allmand Law Firm, PLLC.