Your efforts to improve your financial health over the last few years proved fruitless. You thought about filing for bankruptcy, but feel uncertain about whether the move makes sense.
To help, read these bankruptcy myths from the American Bankruptcy Institute. After separating fact from fiction, you may decide your next move from a well-informed position.
“Once you file, kiss your credit goodbye for life.”
Initially, bankruptcy does a number on your credit score, but not for the rest of your life. It may take your credit up to seven to 10 years to bounce back, but that does not mean credit card companies want nothing to do with you. You may get credit card offers in the weeks following your debt discharge, albeit for secured cards with small limits.
“Your spouse must file with you.”
Spouses do not have to file together if only one of them wants to. That said, some couples have shared debt that affects their shared and individual financial health. Under such circumstances, it makes sense for both to file rather than one.
“Do not worry about your pre-filing spending spree.”
Sometimes, people go on a spending spree before filing because they believe that they discharge their most-recent debt with the rest with debt discharge. If you believe this myth and max out your card before filing for bankruptcy, the court may accuse you of fraud. Debt accrued via fraudulent means does not qualify for discharge, so you must add it to the amount you must repay.
Decide whether to file for bankruptcy with reliable information and insights. Do not let myths steer you down the wrong path.
