Although bankruptcy can give them the fresh financial start they desperately need, many New York residents refrain from filing because they have been discouraged by certain myths. To dispel these assumptions, it is important to understand what the bankruptcy process consists of and how it does -and does not- affect their ability to earn a living, keep certain assets, and apply for future credit.

Myth: You lose everything in a New York bankruptcy

As much as they need debt relief, people worry about losing their home, their vehicle, and other belongings if they file for bankruptcy. The reality is that both state and federal bankruptcy law offer generous exemptions.

In certain cases a person who files for Chapter 7 will have to turn non-exempt property over to their trustee to be sold for the benefit of creditors, but most Chapter 7 debtors keep all their assets. Anyone wanting to protect valuable belongings can consider Chapter 13, which will allow them to repay their debts through an approved plan and keep their belongings.

Myth: You won’t get credit for 7 to 10 years

People worry that they will have to go up to a decade without access to credit if they file for bankruptcy. While it’s true that the filing remains on the person’s credit report for 10 years, over ninety percent of a credit score is based on their financial responsibility over the past three years. Ex-bankrupts have qualified for mortgages and car leases in as little as two years post-discharge. Many people report getting offers for unsecured credit cards within a month after their discharge, some of them from issuers that were listed on the bankruptcy.

Myth: You can’t file for bankruptcy if you make ‘too much’ money

Another common assumption is that people in a higher income bracket are not eligible to file for bankruptcy. There are income limits for Chapter 7, but one’s eligibility for filing is actually determined by thoroughly analyzing their gross income, the size of their family, their liabilities, and other factors. Anyone who does have too much disposable income to qualify for Chapter 7 has the option of filing for Chapter 13.

Myth: Bankruptcy attorneys are too expensive

Bankruptcy assistance is much more affordable than people assume. Costs will vary according to the debtor’s particular scenario. Many individuals scurry to avoid lawsuits by liquidating their retirement accounts, not understanding that a conversation with a bankruptcy attorney can help eliminate debt without jeopardizing their future.

If you are experiencing financial difficulties, a New York bankruptcy attorney can help you ease the burden without requiring you to give up everything you own or relinquish access to all future credit. Once you are discharged, the rebuilding process can begin. Jayson Lutzky is a lawyer with over 33 years of experience. He handles personal bankruptcy cases and offers free in-person consultations. Call his office at 718-514-6619 to set up your appointment and get on your way to a fresh financial future. Visit to learn more about Mr. Lutzky’s services.