Bankruptcy is an area of the law that people avoid. They don’t want to think that they might need its protections one day, and as a result, lies about what it can and can’t do, and what happens in a typical case, gain a foothold in the popular consciousness. This is particularly so since it is to bill collectors’ advantage to continue to spread these lies in the hopes people actually believe them.
Unfortunately, being lies, they’re wrong, and in most cases, really, really wrong.
This article will talk about 15 of the most common lies about bankruptcy. Each lie has a link–clicking on it will take you to a description of the lie, along with our “Truth-o-Meter” rating.
Lie #1: Congress Eliminated Bankruptcy in 2005.
Lie #2: Everyone Will Know You Filed for Bankruptcy.
Lie #3: If You File for Bankruptcy, You Will Lose Everything You Have.
Lie #4: You Will Never Be Able to Own Anything Ever Again.
Lie #5: You Will Never Be Able to Get Credit Ever Again.
Lie #6: Filing Bankruptcy Will Destroy Your Credit for 10 Years.
Lie #7: If You’re Married, Both You and Your Spouse Have to File for Bankruptcy.
Lie #8: It’s Really Hard (and Expensive) to File for Bankruptcy.
Lie #9: Only Deadbeats File for Bankruptcy (aka Filing Bankruptcy Means You’re a Bad Person).
Lie #10: Only Big Businesses Can File for Chapter 11, Not People.
Lie #11: Bankruptcy Won’t Stop Creditors from Harassing You and Your Family.
Lie #12: Bankruptcy Can Lead to Divorce.
Lie #13: You Can’t Get Rid of Back Taxes in Bankruptcy.
Lie #14: You Can Only File Once for Bankruptcy Protection.
Lie #15: There is a Minimum Amount of Debt Required to File for Bankruptcy.