Common Myths About Bankruptcy

Bankruptcy seems like an easy way of debt elimination, but the reality is a lot worse than most people realize. Following is a list of common bankruptcy myths:

You will eliminate all debt: Bankruptcy will not get rid of all your debts. There are some that cannot be discharged in bankruptcy like taxes, child support, alimony, student loans, etc.

You will have a new beginning: Bankruptcy does not put you back at square one – it actually puts you at a negative beginning. As bankruptcy will be reflected on your credit report for 10 years, creditors will not be able to offer you credit terms – and if they do, they will cost a lot in interest.

You can still keep some accounts out of bankruptcy: There are very strict bankruptcy laws that include stiff punishment if you try to hide or not include any accounts. The only ones you don’t have to include with filing for bankruptcy are ones that you will have paid off before you file.

It’s easy to file for bankruptcy: Filing is extremely time consuming, as well as expensive. Recent bankruptcy law changes also make it much more difficult to file as well.

Debts are removed for free: Bankruptcy makes you debt free only by liquidating your assets – which could mean losing your home, car, etc.