Despite the thousands of Americans who file bankruptcy every year, myths about bankruptcy have persisted.
Below are four more myths about bankruptcy that debtors should not believe:
Myth #1 - If you file bankruptcy, creditors will take your valuable assets and all of your money.
Truth - The truth is that bankruptcy offers very generous exemptions on the federal and state level. Most debtors never lose any assets during bankruptcy because their assets' value falls below the dollar amount allowed by bankruptcy exemptions. Furthermore, despite what some would have you believe, most Americans do not have assets which are even worth liquidating for the purpose of paying debt. And those assets such as a home or a car which are valuable are usually exempt from seizure in bankruptcy.
Myth #2 - Filing bankruptcy will ruin your reputation.
Fact - People know that we are all facing financially trying times during this recession and that many need to file bankruptcy. Despite the propaganda war against bankruptcy, ordinary Americans are beginning to understand the benefits that bankruptcy offers individuals and communities.
Myth #3 - You need to close all of your bank accounts if you file bankruptcy.
Fact - You do not need to close your bank accounts just because you have filed bankruptcy. As long as you do not have an over drafted bank account, you should be able to keep that account during bankruptcy.
Myth # 4 - Once you file bankruptcy no one will want to do business with you, you won't be able to even rent an apartment, buy a home or get insurance.
Fact - Debtors exiting bankruptcy are able to do financial business soon afterwards. Within only a few short years many are able to purchase a home and get unsecured credit cards.