It’s not a surprise that there are myths about bankruptcy because it has long been a taboo subject in America. Many people worry about choosing bankruptcy and how they will be perceived, but the reality is that this protection is designed to help people who are in situations like yours.
The myths about bankruptcy could hold you back from doing what is most beneficial for you. Here are four myths that you shouldn’t believe.
Bankruptcy filers aren’t responsible
To start with, there are dozens of reasons why people end up seeking bankruptcy. You might have had a medical emergency, lost your job suddenly or had other issues that led to debt. Not all people who file for bankruptcy were irresponsible with their money.
Bankruptcy ruins your credit forever
This is not true. While bankruptcy may appear on your credit report for around seven years, you can begin to rebuild your credit right away. Some people find that they actually see an improvement in their credit scores quickly, since removing their debts allows them to make other payments on time.
Both parties in a marriage must file bankruptcy together
If you share debts that you want to discharge, filing bankruptcy together isn’t a bad idea. However, if you have separate debt that you want to discharge, you can do so on your own.
You’re going to lose everything if you file for bankruptcy
It is highly unlikely that you’ll lose everything in bankruptcy. If you file for a Chapter 7 bankruptcy, or liquidation bankruptcy, you may have to give up some assets, but there are exemptions you can use to protect much of what you own. If you file for Chapter 13 bankruptcy, you make payments and don’t necessarily have to give up anything.
These are four myths you should know the truth about. Make decisions based on facts, and you’ll know if bankruptcy is the right choice for you.