Secret #1 - Most people do not lose their personal possessions through bankruptcy.

Although it is true that you may be required to surrender your property there are provisions within the Bankruptcy Code called exemptions that were placed there to protect your property.

Secret #2 - You are NOT a failure and the world WILL NOT look down upon you for filing bankruptcy.

Did you know that Walt Disney and Laugh-o-Gram Films were forced into bankruptcy in October 1923? Walt lost the rights to Oswald the Lucky Rabbit. At that point Walt thought his career was over and he along with his wife moved to California. Walt at that point took Oswald and gave him a “fresh start” and created Mickey Mouse. The rest is history as they say. Walt and many others including President Harry Truman had to look to the courts for assistance through bankruptcy to get their financial life back on track.

Secret #3 - You can qualify for credit again after filing bankruptcy.

You will begin to receive credit offers before you are even discharged. Although with a bankruptcy on your record you can get credit. The side effect of the bankruptcy is that you will probably be at a higher interest rate or down payment until re-establish your credit again. How do you that? Being smart is the first step. You do not run out and charge up lines of credit again. You pay your existing car payment or house payment on time each and every month. Not within the grace period or within the 30 days, on time each and every month and your credit will begin to rebuild.

Secret #4 - That you can file bankruptcy with very little debt and sometimes you can file for free.

There is no income requirement for a Chapter 7. In addition every debtor’s situation is unique. For one person $5,000 worth of debt maybe manageable. For another debtor $5,000 maybe strangling them each and every month and preventing them from putting food on the table or taking their prescriptions because they cannot to purchase them.

Secret #5 - You will NOT ruin your spouse's credit if they decide to not file.

If your spouse has good credit then it you probably have separate lines of credit without them on it. If this is true and your spouse is not financially liable for your debt, you can file bankruptcy and not include your spouse. This way you can discharge your debt and your spouse can KEEP their good credit.

Secret #6 - You can still file a Chapter 7!

Your creditors will love for you to believe this; however it just is not true. It is true that it may be more difficult for you to qualify for a Chapter 7 but the new legislation has not eliminated the Chapter 7 provision. The only way to know whether or not you qualify is to speak to a qualified attorney or individual training in the new bankruptcy law.

Secret #7 - God says the forgiveness of debt is mandantory.

I would never proclaim to tell you what God thinks but I can tell you what the bible says about debt. Deuteronomy 15:1-2 At the end of every seven-year period you shall have a relaxation of debts, which shall be observed as follows. Every creditor shall relax his claim on what he has loaned his neighbor; he must not press his neighbor, his kinsman, because a relaxation in honor of the LORD has been proclaimed.

All throughout the good book you will find many references to debts, usury (interest) and compassion for the poor:

Deuteronomy 23:19 - "Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury."

Deuteronomy 23:20 - "Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it."

Exodus 22:25 - "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury."
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Ezekiel 18:8 - "He that hath not given forth upon usury, neither hath taken any increase, that hath withdrawn his hand from iniquity, hath executed true judgment between man and man."

Ezekiel 18:13 - "Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him."

Ezekiel 18:17 - "That hath taken off his hand from the poor, that hath not received usury nor increase, hath executed my judgments, hath walked in my statutes; he shall not die for the iniquity of his father, he shall surely live."

Ezekiel 22:12 - "In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord GOD."

Isaiah 24:2 - "And it shall be, as with the people, so with the priest; as with the servant, so with his master; as with the maid, so with her mistress; as with the buyer, so with the seller; as with the lender, so with the borrower; as with the taker of usury, so with the giver of usury to him."

Jeremiah 15:10 - "Woe is me, my mother, that thou hast borne me a man of strife and a man of contention to the whole earth! I have neither lent on usury, nor men have lent to me on usury; yet every one of them doth curse me."

Leviticus 25:36 - "Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee."

Leviticus 25:37 - "Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase."

Nehemiah 5:7 - "Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, Ye exact usury, every one of his brother. And I set a great assembly against them."

Nehemiah 5:10 - "I likewise, and my brethren, and my servants, might exact of them money and corn: I pray you, let us leave off this usury."

Psalm 15:5 - "He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved."

Proverbs 28:8 - "He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor."

Secret #8 - You will not lose your retirment in bankruptcy.

If your plan truly qualifies as an IRA or 401(k) or other pension plans your retirement will be protected from the creditors. This was reinforced by the Rousey v. Jacoway.

Secret #9 - Even if you have filed for bankruptcy before you may still qualify for a Chapter 7.

The short answer to that is it depends. It depends on how long ago was your filing. Was it more that 8 years ago? Did you get a discharge or was your case dismissed? Do you qualify for a Chapter 7 today or would a Chapter 13 be better for you? The only way to know for sure is to speak to a professional.

Secret #10 - Even though bankruptcy is public record very few people will know that you filed.

The fact is that the filing is public record. The question you must ask yourself is does your local paper print the bankruptcy filings in the public notice section. If you live in a small town then your neighbors might find out. However, if you live in a metropolitan area your neighbors, employer or family members may never find out that you filed bankruptcy until you tell them. Many of my clients say that when they spoke to friends the reaction was not that the friends were surprised the client filed but rather the client was surprised that the friend filed and the client never knew about it.