There are many myths and misconceptions about bankruptcy. While some would hope that these myths were harmless, the fact is that many of these untruths are terribly harmful to debtors.
Let's take a look at some of these myths so we can get to the truth of the matter:
Myth #1 - Bankruptcy Is For The Rich And Famous (but mostly rich)
One of the most common myths surrounding bankruptcy since bankruptcy reforms were implemented in 2005 is the belief that bankruptcy is so expensive that only the financially well-off can afford it. The truth is that bankruptcy is still affordable and for those debtors who have limited resources some bankruptcy attorneys offer payment plans. If a debtor files Chapter 13 bankruptcy
, bankruptcy fees can be repaid over the course of 3 to 5 years as part of the repayment plan.
Myth #2 - New Rules Make Bankruptcy Useless
Once again, 2005 bankruptcy reforms gave life to the myth that it had become impossible to discharge debts in bankruptcy. But this is untrue. The truth is that debtors can still discharge debts in Chapter 7 bankruptcy
and Chapter 13 bankruptcy. The bankruptcy reforms in 2005 made it a little more difficult to qualify for Chapter 7 bankruptcy if you have regular income. However, most debtors who are poor and unable to afford their debts can get a full discharge in Chapter 7 bankruptcy.
Myth #3 - After Taking Your Credit Counseling Course You Need To Wait 180 Days To File Bankruptcy
Bankruptcy debtors are required to take a credit counseling course within 180 days of filing bankruptcy, not before. Failure to take the course will end in a bankruptcy discharge denial. However, the debtor is allowed to file bankruptcy immediately, even if they have yet to take the course.