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Bankruptcy myths: Don’t believe these to be true

There are many people out there who have filed for bankruptcy. And there are just as many who hope to do so at some point in the future.

Even though filing for bankruptcy is not the ideal financial situation, it may be the best thing you can to do eliminate or reorganize some or all of your debt.

As you learn more about the bankruptcy process, you may come across some bad information. Unfortunately, if you believe the many bankruptcy myths that are circulating, it's possible that you could end up making a poor decision.

Here are five bankruptcy myths that you should ignore:

  • Filing for bankruptcy means that you are a deadbeat. This simply isn't true. There are many reasons to file for bankruptcy, such as if you have run into tough times with your job or health. Just because you're considering this doesn't mean that you're trying to avoid paying your bills.
  • Bankruptcy will kill your credit score forever. There is no denying the fact that filing for bankruptcy will have a negative impact on your credit, as it will remain on your report for a minimum of seven years. However, there are things you can do after filing for bankruptcy to pick up the pieces.
  • Bankruptcy means you'll lose all your property. This isn't true, as there are many exemptions that can work in your favor. For instance, with Chapter 13 bankruptcy you are reorganizing your debt, which puts you in position to keep most or all of your property.
  • There is no chance you'll lose your property. Just as there are people who believe they'll lose everything, there are also those who think they'll lose nothing. This isn't true either, as you could find yourself parting with something of great value during this process.
  • You have to be poor to be eligible for bankruptcy. It's a common belief that you have to be almost out of money in order to use bankruptcy to improve your situation. This isn't always the case. Even if you don't qualify for Chapter 7 bankruptcy, Chapter 13 may be an option.

These are the types of bankruptcy myths that you don't want to believe. Instead, learn more about your legal rights so you can make sound decisions that will benefit you now and in the future.

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