1. Everyone will know I’ve filed for bankruptcy.
Chances are pretty good that the only people who will know about your case are your creditors. While it’s true that a bankruptcy fling is a public record, unless someone has a reason to look your case up, it’s unlikely that anyone will just stumble across your filing.
2. All debts are wiped out in Chapter 7 bankruptcy.
Certain types of debts are not discharged. Amongst others, child support, alimony, fines, restitution, fraud, and many taxes will survive a chapter…in cases like this, think about a chapter 13.
3. I’ll lose everything I have.
Only rarely do I see people lose anything in a bankruptcy. Sure, people lose houses and cars all the time. However, it’s because they don’t make payments- not because of bankruptcy.
4. I’ll never get credit again.
You might not have great credit anytime soon, shortly after discharge many people will be quick to lend- all your old debt is gone- you can afford to pay. Just remember it might not be the best deal out there.
5. If you’re married, both spouses have to file for bankruptcy.
Rarely does it make sense for both spouses to not file. However, especially for people recently married, it can be a good idea.
6. It’s really hard to file for bankruptcy.
Without the proper guidance (an attorney) it can be a nightmare. The law in 2005 was changed to make it harder for people to file bankruptcy. It’s more important than ever to have help.
7. Only deadbeats file for bankruptcy.
There are as many reasons for bankruptcy filings as there are people who need to file. The most common reasons I see for bankruptcy are divorce, job loss, or huge amounts of medical bills. Most people that file only do so after exhausting all available options.
8. I want to “leave someone out” because if “I file on them” I will “be going bankrupt” on my…
The law requires you to list all of your debts…just because you list a debt does not mean that a certain creditor won’t get paid. In fact, if you leave someone out, you take a chance of that creditor not getting paid by the bankruptcy court.
9. Filing for bankruptcy will improve my credit.
Bankruptcy is the worst thing to a credit rating. However, after the filing, often, credit will improve as there are no more current collection accounts.