Lloyd Koehler, Indiana Bankruptcy Attorney in southern Indiana has spent twenty years helping individuals and business owners in Indiana with the bankruptcy process and all its related issues.

One of the things he has learned is that mistaken ideas, misconceptions, and myths about bankruptcy will never be in short supply.

We’d like to dispel a few of those, right here.

You will never have credit again

False. Many people begin receiving offers for credit shortly after securing their discharge. The discharge of debt can help you begin rebuilding your credit.

I will lose my house and/or car

False – Bankruptcy is a sort of “bail-out” for those in debt and debtors, not a punishment. The bankruptcy code understands that you need to be able to get to and from work and you need somewhere to live. If you have a home with a mortgage that is not significantly upside down, that you have the income to make the payments toward and you don’t have much more equity in the home than the exemption listed above you will likely be able to keep it. The same rules hold true with your vehicle.

Filing for Bankruptcy is expensive

The amounts you pay are minimal when compared to your costs of not filing. The interest alone on outstanding credit card debt will likely far exceed the costs to file.

Creditors can still harass you after filing for bankruptcy.

No, they cannot. The automatic stay that occurs when you file for bankruptcy prevents creditors from taking any further collection actions, including contacting you, under penalty of law.

If you are married, your spouse has to file for bankruptcy with you.

Married couples can file together or separately, whichever is more economically advantageous for them.

There is no limitation on your purchasing property after bankruptcy anymore than there is now.

Bankruptcy cannot discharge your taxes.

Yes, it can. Certain tax burdens can be discharged along with your other debts.

You can only file for bankruptcy once.

There is no limit on the number of times you can file for Chapter 7 or Chapter 13 bankruptcy. There are limitations on how often you can file for bankruptcy protection.

Under the new laws it is very difficult to file for bankruptcy.

False. Bankruptcy still remains a viable option for dealing with overwhelming debt and getting a fresh start.

Filing for bankruptcy will hurt your credit for 10 years

Many people begin rebuilding their credit soon after their discharge from bankruptcy. With your discharged debts removed from your credit report, you can build credit more quickly.

Only bad people file for bankruptcy

Not true – No one wants to file for bankruptcy. People would rather pay the debts they have. However, the bankruptcy code exists in our country to help people get out from under debt. It is simply a law that some people need to use to get their finances and financial health back on course. It does not make you a bad person.

If you file for bankruptcy, you will lose everything you own.

Not true. There are many exemptions for different types of property such as homes and autos under the bankruptcy code. For the majority of people, they are eligible for enough exemptions that they will lose none of their property.