Top 5 Myths about Bankruptcy

You will never be able to own anything again.  FALSE.   There are no restrictions in future ownership.  Donald Trump & Walt Disney are examples.

Filing bankruptcy will hurt your credit for 10 years.  FALSE.  Bankruptcy is reported on your credit report for up to 10 years, but it can drop off after 7 often times.  Most people’s credit score improves after filing Chapter 7 or Chapter 13.  Mayer & Newton offers all our clients a free course called 720, which helps raise your credit score after filing.

You will never get credit again.  FALSE.  People in Chapter 13 can borrow money during the case.  Chapter 7 filers get inundated with offers for new credit cards and car loans after their discharge.  Usually the credit rate is high, but credit is available.  Bankruptcy gets rid of debt which puts you in a better position.

Bankruptcy represents personal or moral failure. FALSE.  More than 90% of bankruptcy filings are traceable to job loss, illness, or divorce, factors largely out of anyone’s control.  Most people are good, hard-working people, like you and me, who file as a last resort.  The bankruptcy laws are morally and ethically based on sound biblical principals which demand the routine cancellation of excessive debt.

If you are married, both you and your spouse have to file bankruptcy.  FALSE.  In most cases where a husband and wife have a lot of debt it makes sense and saves money to file together.  In many cases only one spouse has the debt, that person can file and your filing will have no direct impact on your spouse’s credit.