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15 Bankruptcy Myths – Bankruptcy FAQ’s

Q? General Bankruptcy Myths

A.     Most, if not all bankruptcy myths are completely untrue. Let's prove this by starting with the first one: That bankruptcy is bad for you - FALSE!  Bankruptcy is here to help you - NOT to hurt you.  Bankruptcy was created to assist anyone who found themself in a moment of financial difficulty. All you have to do is call the Lozano Law Center and they will assist you in properly and legally eliminating your debt and getting you back on the road to a strong financial future.  If you are currently facing financial hardship, then you will be surprised to discover that filing bankruptcy will be one of the best decisions of your life. 

Q? How fast is the bankruptcy process?

A.     The time period for a Chapter 7 bankruptcy is only five months long.  But let's be more specific.  When you hire the Lozano Law Center the law firm takes over the responsibility of all your debt. They immediately begin preparing your case and once they file it, you attend a hearing 45 days after filing. Ninety days after your hearing the Court issues you a formal discharge and your case is completed. Other bankruptcies such as Chapter 13s and Chapter 11s have longer time periods.  

Q? Is my house and car protected in bankruptcy?

A.     Yes.  Houses and cars are protected in bankruptcy.  Houses are protected under both the Homestead Act and special bankruptcy exemption codes depending upon which state you reside in.  California has some of the BEST exemption codes in the United States - protecting up to $600,000 of equity for example in a person's home.  There are also special exemption codes to protect cars as well. All of this will be explained to you when you make your free consultation appointment with one of the attorneys at the Lozano Law Center.

Q? Can I buy a house or new car after bankruptcy?

A.     Absolutely YES!  Of course you can buy a house or car after bankruptcy.  This is one of the greatest myths about filing bankruptcy.  There is NO PENALTY for filing a bankruptcy!  If a person finds themself in a moment of financial hardship, they can rely on bankruptcy to assist them in eliminating their debt and allowing themself to rebuild their financial future.

Q? How fast can I rebuild my credit?

A.     It will only take one to two years to rebuild your credit back to its regular status after you complete your case.  And you actually do not need to do anything to help rebuild your credit other than to not fall back into default with any existing or new credit.  Please note however that rebuilding credit is different from credit reporting.  The three major credit reporting companies - Experian, Equifax and Trans Union list the bankruptcy status on a person's credit report for ten years but this does not harm your ability to acquire credit - it is only reporting that you filed bankruptcy.  After the ten years the status drops off your credit report.

Q? How fast can I get credit after bankruptcy?

A.     The day after you complete your case you can begin to acquire new credit.  The first step is to acquire a debit card.  This is not credit, but it is the first step in re-establishing credibility with your bank as to who you are and your trustworthiness in transacting accounts.  Then apply for a secured credit card for $300-$500.  This will require you to place the same amount of money in that same bank as collateral as you use the card while your making purchases for several months.  After proving your credibility to that bank, then request a regular credit card, and you are on your way to reacquiring regular credit status.

Q? Does my spouse and I both have to file bankruptcy since we are married?

A.     No. You are not required to file bankruptcy just because your spouse wishes to. However, California is a Community Property state, meaning that even though only one spouse may have incurred the debt or signed contracts or appears to be the only liable party, under California law, the other spouse is also liable.  It would be advisable that both you and your spouse make a free consultation appointment with an attorney from the Lozano Law Center to discuss this issue and your debt to determine if filing an individual or joint bankruptcy would be in your best interest. 

Q? Can I prepare the bankruptcy myself?

A.     Anyone can represent themselves in any court of law in the United States - but it is not advisable.  Would you want to represent yourself in a criminal case? or a personal injury case?    A bankruptcy case requires experience, knowledge, skill and a constant awareness of the ever changing rules of law of the federal system.  The attorneys at the Lozano Law Center are California State Board Certified bankruptcy experts who have been practicing in Federal Court for over 28 years.  They have successfully completed over 80,000 cases.  It would be highly recommended that you schedule a free consultation with one of our attorneys to advise you about your case and what they would recommend.

Q? Is it affordable to file bankruptcy?

A.     Yes.  Law firms like ours - the Lozano Law Center - recognize that the majority of people seeking bankruptcy assistance are doing so because they are currently experiencing financial hardship.  So it only makes sense that our prices are extremely reasonable or people just wouldn't hire us.  Which explains why the Lozano Law Center has been in business for over 28 years helping people and providing them service that they can afford.  We have payment plans, incentive programs, low down payments to get cases started - everything a client needs. 

Q? If I file bankruptcy, will the harassing phone calls stop?

A.     Yes, the harassing phone calls will stop.  Actually, the phone calls will stop the moment you hire the Lozano Law Center because our law firm takes over as your representative and we become responsible for all your debt and thus all your creditor phone calls are redirected over to our law firm.  

Q? Do I have to pay all the fees up front the moment I hire the law firm?

A.     No, you only have to put down a small deposit to get started.  The deposit is immediately deducted from your balance, and then you can make payments at no interest until the balance is paid off.  No rush, no stress.  During the entire time the law firm is handling your creditor phone calls and managing your debt.

Q? How do you qualify for bankruptcy?

A.     To qualify for bankruptcy one has to first tell the truth about your current financial situation, and second, provide all the information and documentation required by the Court, as well as correctly prepare and answer all the questions necessary to complete the bankruptcy petition, which is what the attorneys at the Lozano Law Center are here to do.  They are experts in this field and are here to assist you 24 hours a day, seven days a week.  Call now for a free consultation. 

Q? My spouse and I are currently separated, can we still file jointly?

A.     Yes.  That fact that you are not yet divorced means that you are still married and thus that allows you to still file a bankruptcy under joint status.

Q? Can bankruptcy discharge tax debt?.

A.      The standard answer is that taxes are non-dischargeable.  This however is not true.  Taxes that are less than 3 years old are non-dischargeable, BUT taxes that are older than 3 years MAY BE dischargeable.  Only an experienced bankruptcy attorney would be able to advise you properly on whether your taxes may be dischargeable.  The attorneys at the Lozano Law Center have been practicing bankruptcy law for over 28 years. They are California State Board Certified experts.  They would be qualified to review and advise you on whether or not your tax debt would be eligible for discharge.  Please make an appointment today for a free consultation with one of our attorneys to review your tax situation.

Q? How many times can I file bankruptcy?

A.      You can file Chapter 7 bankruptcy once every 8 years.   You can file Chapter 13 bankruptcy as often as you need to. 

Q? Is it possible to pick and choose the debts that I want listed in my bankruptcy?

A.     No, all debt must be listed in your bankruptcy, but please remember that there are different "types" of debt - and bankruptcy only discharges "unsecured" dischargeable debt.  It does not discharge secured debt that you choose to keep (such as houses or cars that you are keeping and still paying on); priority debt (such as recent tax debt); and non-dischargeable unsecured debt (such as student loans). So again, you must first list all your debt - especially your unsecured debt such as credit card debt. Now can you purposely choose to keep certain debt out of a bankruptcy?  The answer is no.  You cannot favor one creditor over another.  That would mean certain creditors would be wiped out while other creditors continued to be paid by you. That would not be fair.  That would mean all creditors would not be treated equally.  Thus it is not possible to pick and choose which debts are placed into the bankruptcy.  

Best Bankruptcy lawyers in Ontario


David Lozano has been very professional from the beginning with our case. His staff has been very professional, knowledgeable, respectful and very helpful with the process from beginning to end! We are very fortunate to have Mr. Lozano on our side!


Excellent attorney, and great staff that actually care about their clients. Definitely recommend!


I highly recommend the Law Office of David Lozano.


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