One reason that many people avoid filing bankruptcy at all costs is because of the fear of losing credit. Most Americans have become addicted to having plastic and feel they can not live without it. Many people go into the bankruptcy lawyer and ask the question, can I keep a credit card out of my bankruptcy filing? Many of them have a plan of how it's technically not a creditor because there's no balance on the card. While this all sounds like a good plan, it's kind of a gray area and will be straightened out by the creditor if the bankruptcy truste does not find out about it before. Creditors randomly run credit reports on all their customers and when a bankruptcy filing pops up, they immediately close the account. So the idea of keeping an account open might work for a short period of time but eventually would be closed.
That's only part of the problem. When someone is filing bankruptcy, the bankruptcy court requires the debtor to be wholly honest. If someone is holding something back, the bankruptcy trust will start the questioning the integrity of the individual in the bankruptcy filing. The last thing an individual filing for bankruptcy needs is the bankruptcy trustee to be digging into every detail of their bankruptcy petition. If there is a question about the creditors, there will probably be questions about the bankruptcy exemptions and the valuation of the property on the schedules. In today's technology driven world, it is easy for the trustees to do a simple investigation about the individual filing bankruptcy. If there is nothing online, they might just take a ride by the person's house and take a look for themselves.
The best advice for someone filing bankruptcy is to hire a bankruptcy attorney and let them earn their keep. A bankruptcy attorney will know how to use the bankruptcy exemption laws to protect the maximum amount of property and get a successful bankruptcy discharge. When Congress created bankruptcy they knew that for an individual to really get a fresh start they could not lose everything they owned. This is where bankruptcy exemptions came in to play. Every state has their own exemptions and they vary by demographics. For example, a farmer in Kansas would need to be able to keep their farm equipment to be able to continue working. There are exemptions for automobiles and even a wild-card exemption that will protect just about anything. There is no reason to be dishonest with the bankruptcy court when there are generous amounts of property that could be protected to everyone filing. The person filing bankruptcy just needs to know how to use these laws to benefit their personal situation.