Myths About Bankruptcy

Sunday, July 12, 2020 - 16:39


Often one of the hardest parts about bankruptcy is dealing with the inaccurate myths.  Often, what people hear about the bankruptcy process are simply not true.

In an effort to dispel some of the myths we have assembled a list of common myths followed by the facts.

The myths and facts listed below are a sample of questions commonly asked about Bankruptcy.

Myth: An individual filing for bankruptcy will lose everything.
Fact: No. In fact, many people who file for bankruptcy keep many of their major assets. 

Myth: Bankruptcy lasts for 7 years and you can’t get credit for that time.
Fact: A number of factors determine how long a bankruptcy can last, such as income, or whether you are a first time bankrupt. This answer can vary.   

Myth: Student loans cannot be released by bankruptcy.
Fact: Bankruptcy can actually help with student loan debt if you have been out of school for 7+ years.

Myth: If a husband or wife file for bankruptcy or a proposal, then their spouse will also have to file.
Fact: No. Your spouse can decide how they need to proceed based on their own finances.  

Myth: Only irresponsible people file for bankruptcy and then are frowned upon by others.
Fact: No. Anyone can file for bankruptcy. Debt problems are common among all ages. The faster you deal with financial problems, the easier they are to overcome. 

Myth: If my spouse and/or I file for bankruptcy, the bank will take our house.
Fact: No. Most people that want to keep their homes are able to do so, even in bankruptcy.

Myth: All bankruptcies are published in the paper.
Fact: No. Most personal bankruptcies are NOT published in newspapers, however, business bankruptcies may be published. 

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