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Bankruptcy Myths

Trust a Torrance Bankruptcy Lawyer for Answers!

There are many myths surrounding the bankruptcy process. If you have questions about bankruptcy or think filing may be the best option for you, look to the Law Offices of James C. Shields to provide quality advice and representation. Our Torrance firm can listen to your needs and defend your interests if you are currently in considerable debt. Consider the following myths before making your decision.

It's too late to file for bankruptcy if you have been sued by a creditor.

Filing for bankruptcy stops all lawsuits, foreclosures, sales of your property, and/or wage attachment immediately with few exceptions. That means you can use bankruptcy to put an automatic stop on all actions against you, even a creditor lawsuit.

You should cash in your 401K/retirement plan before filing for bankruptcy.

Retirement funds cannot be touched by bankruptcy, which means it is typically best to leave them as they are. A debtor can retain the retirement money as long as they remain within that retirement account. Withdrawing this retirement money can bring about heavy taxes at the end of the year and potential cuts on the amount you receive.

After getting married, the bankruptcy filing of one spouse will ruin the other spouse's credit.

The other spouse does not need to join the other in filing for bankruptcy and their credit will likely be unaffected. The key is that the spouse filing for bankruptcy must have only individual debt. If debt is from joint credit cards or accounts, it may mean the couple will have to file together.

You need to be behind on your bills to file for bankruptcy.

Even if you are making regular minimum payments on your debt, your creditors will try to get much more out of you than the principle amount by way of interest. Declaring bankruptcy will stop your creditors from sending you bills and taking any further action against you.

You will lose your job if you file for bankruptcy.

Employers are prohibited from discriminating against anyone who declares bankruptcy. It stands to reason that after filing for bankruptcy you have more time and energy to focus on your job rather than your debt, making you a better employee. If your employer does try to fire you, you can take legal action against them. Contact our firm to learn more about your rights in the bankruptcy process.

Do you have questions regarding your debt and bankruptcy? Call our office today!

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