Many people have misconceptions when it comes to bankruptcy. People may fear losing cherished property, being regarded with shame in the eyes of their family or even going to jail. Usually these fears are based on myths — not reality. We’re here today to address the five most commonly held false beliefs about bankruptcy:
Myth #1: Filing for bankruptcy will ruin my credit for a long time.
Filing for bankruptcy may temporarily cause your credit score to drop, but it ultimately improves your credit by wiping out your debt. Chances are that your credit is already damaged due to the amount of debt you accumulated leading you to file. Although a record of your bankruptcy filing remains on your credit report for seven years, you can begin rebuilding your credit soon after you’re discharged from your bankruptcy. Start by making full and timely payments on any new debts.
Myth #2: My friends and co-workers will find out about my bankruptcy.
Only the people you tell will know that you filed for bankruptcy. Bankruptcies are public records, but few people actively search public records to find out who they know has filed for bankruptcy.
Myth #3: It is too hard to file bankruptcy and I probably won’t qualify anyway.
The bankruptcy process involves a lot of paperwork and requires you to gather various records, but filing for bankruptcy is actually a smooth process as a Licensed Insolvency Trustee helps you along the way. It is also imperative you disclose everything to your Licensed Insolvency Trustee so he or she can give you with the best advice for your financial situation.
Myth #4: I won’t own be able to purchase property once I’ve filed bankruptcy.
Credit card companies will extend offers to you right after your discharge. Other creditors will only lend to you with less favourable terms or higher interest rates. Over time you can rebuild your credit and overcome any credit obstacles.
