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The 5 Greatest Myths About Bankruptcy in 2010 by Marc Tow

18th January 2011
By Orange County Bankruptcy Attorney in Bankruptcy Law
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The 5 Greatest Myths About Bankruptcy in 2010 by Marc Tow

In this economic climate many more taxpayers, couples, families and businesses are turning to bankruptcy than ever before. When the paychecks have decreased, money has been pulled from every account and bills are piling up, a fresh start can be the perfect solution. What stops most taxpayers is a sense of pride and some facts that they think they know about bankruptcy, but are those things really true? As a bankruptcy attorney for over 30 years, I feel the need to clear the air on these most:

1. I will lose everything.

This is the number one mistake that I hear clients make about bankruptcy. Every state has bankruptcy laws that protect certain types of assets such as your house, car (up to a certain limit), retirement accounts, household good and even jewelry!

2. When I file bankruptcy everyone will find outóeven my neighbors!

This is another major misconception when filing a bankruptcy. Unless you're a movie star or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it's true that bankruptcy is a public legal proceeding, the numbers of people filing are so massive, very few publications have the space, the manpower or the inclination to run all of them. In most cases only the people you choose to tell will ever know.

3. Only losers and crooks file for bankruptcy.

This cannot be further from the truth. The clients I see on a daily bases are regular Americans who have lost control of their finances. Maybe they have lost their job, become underemployed, gone through a divorce or their company has failed. It is extremely hard to predict a recession the size of the one that we are going through now which is why most consumers were not properly prepared. There is nothing to be ashamed of in this; that is why America created bankruptcy laws in the first place: for honest citizens who run into hard times and need a second chance.

4. Filing for a bankruptcy will ruin my credit.

While filing a bankruptcy will negatively affect your credit in the immediate future it can actually help it in the long run. Many people struggle for years and years, not making their payments on time. This shows a long-term inability to pay creditors, which severely affects a personís credit score. If a person who has always had good credit history files bankruptcy as soon as they lose control of their finances, then their credit starts to repair right away.

5. I'll never get credit again.

Quite the contrary. It won't be long before you're getting credit card offers again. They'll just be from subprime lenders that will charge very high interest rates. However, if you're planning to buy a house or a car, you might want to do that before you file. Those loans will be tough to get, and the higher interest rate on such a large purchase would make a significant impact on your payments.

So overall, bankruptcy really isnít as scary as it seems. Average, working-class Americans file every day. And in this economy, it might be a good option for a lot of families.


Best Regards,

Marc Tow
Bankruptcy, Real Estate and Securities attorney for more then 30 years.
Real Estate Broker for more then 10 years.
Finance expert.
Located in Orange County, Newport Beach, California.

About Marc Tow:
Marc is a bankruptcy, real estate, and mortgage attorney in Southern California. He has been in business over 30 years. Marc is well versed in business law, real estate law, estate planning, and investing. You can find him by email at or by calling Marc R. Tow and Associates at 949-975-0544. Feel free to visit for more information.
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About the Author
Occupation: Head Attorney
I have been practicing law for 30 years. I specialize in real estate law, bankruptcy law, civil litigation and business law, working primarily with small and medium-sized private and public companies, families, investors, entrepreneurs and professionals. I truly care about my clients, and work in a personal, friendly environment with the happiness and success of our clientsí companies at the forefront of our priorities.

I have been running my law firm for over 30 years; I have also built a thriving foreclosure company as well as been a licensed real estate broker for several years. I feel as though this helps me to understand all aspects of the law I practice.

Education is very important. I attend continuing education seminars and courses on the topics of Bankruptcy Law and Litigation. I also take online courses when they seem particularly interesting or beneficial.

My experience is vital. I represented a millionaire businessman in a 60 million dollar bankruptcy and three years later he was rich again. I have also represented a family and saved their house from foreclosure and saved them from a financial and marital crisis. These are just two examples of cases that I have had that show how I can adapt to any case or situation.

I have four major objectives:

* To build successful and winning relationships with our clients
* To assume major challenges on behalf of our clients and resolve them
* To support the visions of our clients and attorneys
* To make a positive impact on our community and the legal profession

Above all, I am committed to the long-term success of my clients and offer practical, growth-oriented strategies with precise and timely implementation.
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