7 Myths About Personal Bankruptcy

The myths and misconceptions surrounding personal bankruptcy prevent many people who are in dire need of debt relief from filing bankruptcy

. However, many of these popular beliefs about personal bankruptcy are far from true. Read on to learn the truth about filing bankruptcy.

It"s embarrassing to file for bankruptcy.

While your own experience of situations will define your embarrassment factor, filing personal bankruptcy is nowhere near as embarrassing that being harassed by creditors. Rather, taking responsibility for your financial situation is to be admired.

I"ll lose everything if I file personal bankruptcy.

There are different forms of personal bankruptcy; liquidation and reorganization. The chapter you file will define how much of your assets will be used to repay your creditors. However, you will always be allowed to keep a number of assets, depending on which chapter of bankruptcy you file.

My personal bankruptcy will be public knowledge.

In theory this is true, because everybody has access to the public records that record all bankruptcies. However, it"s highly unlikely that anybody will search these public records. In addition, your creditors are prohibited by law from making your personal insolvency public. The only people who are likely to know are those you tell yourself.

If I file for personal bankruptcy, I can get fired from my job.

An employer is forbidden by law from firing you simply because you filed for bankruptcy and you can sue him if this is the case.

I"ll never get credit after filing personal bankruptcy.

It"s true that a personal bankruptcy remains on your credit report for up to 10 years, but you have the ability to repair your credit before that by sound and responsible financial management. If you apply for any form of credit, make sure the interest rates are reasonable and won"t spin you into a cycle of debt again.

After the bankruptcy laws changed, filing personal bankruptcy is impossible.

You can file for personal bankruptcy, though the 2005 amendments made it more difficult to qualify. It is imperative to know your consumer rights and have a sound understanding of consumer debt law. For every consumer filing personal bankruptcy, retaining the services of a reputable bankruptcy lawyer is the best possible course of action.

You can only file for personal bankruptcy once.

If you have filed for personal bankruptcy, you will have to wait a period of eight years from the discharge date of a chapter 7 filing if you need to file chapter 7 again. If you need to file chapter 13, you must wait four years after the discharge of a chapter 7, and two years after the discharge date of a chapter 13 personal bankruptcy filing.

by: Wystan

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