Myth: People who file bankruptcy lose all their property (or home or car)
Fact: Most debtors do not lose any property. The vast majority of all cases are administered as “No Asset” cases, meaning there are no assets that are both non-exempt and worth enough for the estate to pay the costs of administration.
Myth: People who file bankruptcy never get credit again
Fact: It will take about two years to rebuild credit to the point that you won’t be turned down for a major credit card or loan. Of course, I hope you will choose to stay off that merry-go-round. After approximately four years, you may be able to qualify for a mortgage.
Myth: Only deadbeats file bankruptcy
Fact: I can tell you that my clients are almost always good and upstanding people who simply need financial assistance through a particularly rough patch. Bankruptcy is your right under the law, and is also provided for in the Bible. You should not feel guilty about addressing your problems by seeking a fresh start.
Myth: Banks have lost a lot of money due to bankruptcy filings
Fact: Bank profits from credit cards are at an all time high, over $30 Billion a year. If the banks were truly suffering from bankruptcy losses they would start exercising prudence in lending, instead of carpet bombing American homes with credit card offers every day.
Myth: I only have to list the debt I want to get rid of on my bankruptcy
Fact: All debt must be listed, but you can reaffirm debt such as your home, car(s) and other secured loans. You can also simply make voluntary payments to family or medical providers if you wish.
Myth: It is ok to charge up credit cards just before filing bankruptcy
Fact: Debt acquired after you realize you cannot repay may have to be paid back even after filing bankruptcy.
Myth: If you are married and file bankruptcy, your spouse must file too
Fact: Many married debtors file alone and the spouse is not affected. Unless both are on the debt, a single filing makes more sense.
Myth: My employer will find out and fire me, or my potential future employer will not hire me because I filed for bankruptcy
Fact: The Bankruptcy Code provides that private employers and government agencies may not discriminate based solely on a prior bankruptcy filing.
Myth: I have to be broke or behind on my bills to file bankruptcy
Fact: You do not have to be behind on your bills to file; waiting until the last minute is never a good idea.
MORE MYTHS (every one of these statements is FALSE):
Bankruptcy is not affordable.
I will lose my home.
My credit is destroyed forever.
I will never get a home, an apartment or car.
You can’t go bankrupt anymore since the new law.
The new law says you have to pay everything back.
It will be in the newspaper.
I hear “you can’t go bankruptcy on credit cards any more”.
After you take a credit counseling course, you must wait 6 months before you can file a bankruptcy.
If I file for bankruptcy I’m a failure.
There’s a secret way to make your creditors accept a fraction of the debt.
A debt settlement firm can help me pay off all of my debts at a deep discount in 3 years or less and now I won’t have to file for bankruptcy.
My friend told me that as long as I am going bankrupt I might as well max out my credit cards and use up what is left.
I should “leave one card out” of the bankruptcy.
But my credit score will go down!”
I’ll never get credit again, or; I won’t be able to get credit for 7 years
Bankruptcy does not apply to certain creditors like Bank of America.