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3 Myths about bankruptcy

On Behalf of | Oct 21, 2022 | Bankruptcy |

While no one wants to file as bankrupt, it happens regularly. Each year hundreds of thousands of Americans file. But, unfortunately, this process has built up a fearsome reputation.

The good news is that many of the reasons it is such a scary process are the number of myths people believe about it. Here is the truth about a few of the most common tales regarding bankruptcy.

1. Married couples both need to file

If you share the debt, both spouses must file for bankruptcy. However, most of the time, only one spouse has most of the debt. In these cases, only the spouse with the debt needs to file.

2. It permanently destroys your credit

Filing with your state’s bankruptcy court does not permanently damage your credit. However, you will have fewer options for funding while the bankruptcy is still on your credit report. You might even receive credit offers while the claim is still in your history. However, your access to credit will get much better after it falls from your credit history.

3. You will not need to pay back your reckless spending spree

Because Chapter 7 bankruptcy claims can dissolve credit card debt, many people think they can spend a lot of money immediately before filing with no consequences. However, this is false and reckless spending right before a claim is not dissolved.

Bankruptcy is not as scary or permanent as most people think. Therefore, it could be a good option for you financially if you are desperate.