Going through a bankruptcy can be a very trying time of a person’s life. When they look back on the experience or warn their friends about it, it is understandable if they embellish a bit for dramatic effect. Unfortunately this has given rise to quite a few myths regarding filing and it’s time to debunk a few of the most popular ones.
5 Most Common Bankruptcy Myths:
- When you file for bankruptcy, all of your debts are just wiped away – Sometimes, it depends on assets and your situation. Although Chapter 7 can help to discharge many kinds of debt, it still may not help with student loans, alimony, child support, or any debt that is a result of fraudulent activities.
- You lose all of your possessions when you file – This myth is so pervasive that it stops a lot of people from filing for bankruptcy, but it is false. It specifically protects certain assets like your automobile, home, household goods, and even your retirement plan. Granted you may have to part with some of your luxury items, but it will not completely strip you of all assets.
- There is no real difference between the various bankruptcy types – Untrue. There are major differences between the different chapters. Take the two most common types for instance. Chapter 13 is a consolidation of debts for you to pay back over time, Chapter 7 is known as the “fresh-start” where your debts are wiped clean.
- If you are married then you will both have to file for bankruptcy – This one is simply untrue. If you have joint debts you might want to consider filing together. However, it’s not mandatory. If you or your spouse want to get rid of personal debt respectively, then that is possible.
- You will never be able to get a loan again – Not true. A bankruptcy does stay on your credit report for up 10 years, but you can start repairing the damage immediately. Secured credit cards are a great way to start the process and when used wisely, you should be able to qualify for a loan before long.
Make sure you talk to a great Atlanta bankruptcy attorney about filing. There is no need to let myths about filing scare you away. It could be a great decision for you.