Rumors spread like wildfire and there are plenty of bankruptcy stories to go around.
There are several myths you may need to debunk if you’re planning to file for bankruptcy. Here’s what you should know:
Myth #1: You can only file one bankruptcy in life
Truth: You can file bankruptcy more than one time in life, however, there is a wait time after filing for a Chapter 7 or Chapter 13 bankruptcy. The rules apply differently depending on what bankruptcy you applied for the first time and the one you’re planning to use. For example, you’ll have to wait four years to file a Chapter 13 after a Chapter 7.
Myth #2: You’ll lose everything in bankruptcy
Truth: Many people who file for bankruptcy rarely lose anything. Chapter 7 bankruptcy may require you to liquidate certain assets, but many assets aren’t eligible for liquidation.
Myth #3: Bankruptcy will lead to divorce
Truth: Many strong relationships have lasted through bankruptcy. Oftentimes, marital issues aren’t caused by bankruptcy itself, but by an ongoing problem with money. You may need to talk to your spouse in depth about any issues that may arise when it comes to money.
Myth #4: You’ll never raise your credit up after bankruptcy
Truth: Your credit will likely take a hit after filing for bankruptcy, but that doesn’t mean it’s all gone for good. Credit is built up from large purchases and gradual payments, so all you may need to do is build your credit back up.
After debunking these myths, you may feel better about your choice to file for bankruptcy. You may need to reach out for legal help to know your options.