Bankruptcy Myths Exposed
When it comes to declaring bankruptcy, there are plenty of myths circulating out there - and some of them are doing serious damage to your finances. If you've ever put off filing for bankruptcy because you were embarrassed that everyone would find out or you put it off because you think it's going to permanently destroy your credit score, then it's time to grab a cup of coffee and sit down...
Because we're about to expose the big-time bankruptcy myths that you may be falling for:
Bankruptcy is public, so everyone will know you filed for bankruptcy in Dallas.
With so much of the news devoted to prominent businesses and people filing for bankruptcy, it's no wonder you think your friends and family members will discover your financial burden as soon as you hire a bankruptcy lawyer. But let's focus on one particular word in that previous sentence: prominent. While it is true that bankruptcy filings are public record unless you happen to be a mega-millionaire or a known name, only your creditors will know about your Chapter 7 or Chapter 13 bankruptcy . Besides, think about it this way: who is really going to spend time sorting through the mountainous paperwork of bankruptcies to see if you've ever filed?
I'll lose everything is I file bankruptcy.
Many people believe that in order to satisfy their creditors, they'll be forced to sell their homes, their cars and even their clothes. That's just not so- in fact, federal law presents exemptions that prevent creditors from selling off certain goods and assets, like your home, car, clothes and your retirement savings. Make sure you contact a bankruptcy attorney to find out what's considered exempt in your state.
My credit score will never recover.
Many people think that their credit score will take a permanent turn for the worse when they file for bankruptcy. But the truth of the matter is this: if you've been battling debt for some time now - and there's no end in sight - your credit score has already been damaged. Declaring bankruptcy gives you the chance you need to start over again. Besides, bankruptcy can only be on your credit history for a limited amount of time: for Chapter 7, it's seven to ten years, with Chapter 13 being seven years. As you can see, declaring bankruptcy doesn't leave a permanent black mark on your credit history.
My bankruptcy will affect my partner's finances.
According to bankruptcy attorneys, it's highly unlikely that debt will be in one partner's name only. However, unless the spouse was a co-signor on any of the debt, bankruptcy courts will typically let the debt-free spouse off the hook.
Don't let these big-time bankruptcy myths prevent you from filing and getting the financial fresh start you desperately need.