Researching whether bankruptcy is the best option is no easy task - especially when a large majority of what you find online tends to give credit to major bankruptcy myths. With rumors circulating that declaring bankruptcy will immediately be known by the public (in most cases, that's not true) to bankruptcy's permanent impact on your credit score (it's on there for seven to ten years); it's time to bust more myths about bankruptcy.
Just consider us to be your bankruptcy detectives!
- Only losers file for bankruptcy. For some reason, a great deal of the population seems to believe that filing for bankruptcy is a public display of your financial irresponsibility. While there's no denying that some people file for bankruptcy due to blatant credit card disuse, there are other reasons for filing that in no way reflect on your financial savvy. With just over half of bankruptcy cases arising from medical bills and another chunk resulting from divorce or job loss, the average bankruptcy petitioner is simply an individual who encountered a massive financial pitfall and needs help getting out.
- It's long and complicated to file for bankruptcy. If you're going through the process without a bankruptcy attorney, then yes, the process can be difficult. But with the aid of an experienced bankruptcy attorney, you can expect to see your case approved in just a few months. Additionally, bankruptcy courts grant you an automatic stay during that time, so creditors can't keep harassing you for payments. Finally, don't worry about not being able to afford your bankruptcy attorney - since they work with financially-strained clients for a living, they'll be more likely to work out a payment plan that works for you.
- You can't discharge any tax debt. With regards to a Chapter 7 or Chapter 13 bankruptcy , there are certain requirements and your bankruptcy attorney will be able to help you figure out which one will benefit you most. Some qualifications for a tax discharge include: having filed all of your returns, and the tax debt owed being a minimum of three years old.
- You can max out your credit cards. Don't even try to go on that spending spree once you've filed for bankruptcy. Bankruptcy courts know what to look for - and if they see you spending your money on anything but necessities, they'll be quick to throw out your bankruptcy case. If you're accused of fraud, you can expect to pay back those new credit card debts , at the very minimum.
Don't let bad information and bankruptcy myths prevent you from getting the financial assistance you need.