For a long time a kind of shroud of mystery has surrounded bankruptcy, with the average American completely unaware of how important and valuable bankruptcy is to our society. Now that the economy has gone sour, many creditors are shaking in their boots because they know that bankruptcy is a legitimate option for debtors who are literally drowning in debt. So instead of revealing the truth, we now have many supposed "financial gurus" spreading bankruptcy myths and generally giving this financial lifeboat a bad rep. Let's take a look at two of the most common bankruptcy myths and shed some light on them.
Myth 1: Bankruptcy destroys your financial future.
Fact: This myth is the mother of all bankruptcy myths which keeps many debtors struggling to pay debts when it is clear they will NEVER be paid off because it's impossible. The fact of the matter is that bankruptcy allows debtors who are overwhelmed by debt to rebuild their financial future by forgiving the debt and giving them a chance to start all over again.
Myth 2: People who file for bankruptcy are irresponsible crooks who want to scam society.
Fact: Most people who file for bankruptcy are responsible workers and American taxpayers who have faced a job losses, health crisis or other emergency that has pushed them into bankruptcy. Studies have proven that most bankruptcies are caused by divorce, job losses or medical bills not overspending or credit abuse.