This blog recently discussed a few of the basic bankruptcy myths, and in keeping with the idea that bankruptcy is not a huge mistake or negative action; this blog will continue debunking the many myths about bankruptcy. Here are a few more myths worth discussing.
If you file for bankruptcy, everyone will know about it.
Wrong. Only your creditors, those with a reason to check your credit report, your attorney, the court, your family, and those you share the information with will know. Unlike the bankruptcies of the rich and famous, the average person’s filing is not a matter of media or public scrutiny.
Bankruptcy leads to divorce.
No. If you wind up divorced, it is probably because the marriage was already in trouble due to other problems compounded by financial problems. If you survive financial issues and make it to bankruptcy, odds are the bankruptcy will help your marriage rather than hurt it.
There is a minimum amount of debt required before you can file bankruptcy.
No. You can file bankruptcy with as little as $500. The need to file bankruptcy is based on your income and ability to pay in relation to your debt rather you have $500 in debt or $10,000 in debt.
You can only file bankruptcy once in a lifetime.
Not true. Y0ou cannot abuse the system by filing over and over to avoid paying your bills, but you can file Chapter 7 once every 8 years if need be. Chapter 13 has no restrictions.