 TITLE: Dispell the Myths About Filing Bankruptcy CONTENT: Bankruptcy Myths — What is Fact and What is Fiction\n---------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nFiling bankruptcy can be a scary proposition and one that should not be taken lightly. Even though bankruptcy cases filed in federal courts for fiscal year 2016 are the lowest since 2010, you probably know someone who has recently filed for bankruptcy. Even though you might know someone going through a bankruptcy, that is not to say you know what is truth and was is fiction regarding bankruptcy. Like those scary noises in the middle of night, bankruptcy is not that scary once you are able to cut through the myths and get down to the real truths about bankruptcy.\nBankruptcy Myth #1 — Filing Bankruptcy is Something to be Ashamed of Doing\n--------------------------------------------------------------------------\nThis could not be further from the truth. Many people get into serious financial trouble after a divorce, a major medical problem, or maybe they lost their business or their job, and they are unable to pay their bills. Bankruptcy was designed to help people like these, who for no fault of their own, are now in serious financial trouble and just need help getting out from under all their debt. Bankruptcy is there to help and to afford a person a fresh start. Sure, there are people who abuse the system and carelessly run up a bunch of debt only to file bankruptcy to get out of paying. You are going to find that with anything in life, but for the most part, filing bankruptcy seems to be done by those who are truly in financial dire-straights and need a helping hand.\nBankruptcy is a public legal proceeding and your name could be published in a local newspaper or other public publications, but the chances of someone really reading these listings is slim to none. The only ones that will really know about your bankruptcy will be your creditors.\nBankruptcy Myth #2 — All Debts Will Be Wiped Out in a Chapter 7 Bankruptcy\n--------------------------------------------------------------------------\nThis is a myth. Filing Chapter 7 bankruptcy does not discharge all debt and there are certain types of debts that cannot be discharged. These debts include child support, alimony, student loans, restitution for a criminal act, and debts incurred as the result of fraud.\nBankruptcy Myth #3 — If You Are Married, You and Your Spouse Have to File Bankruptcy\n------------------------------------------------------------------------------------\nNot necessarily. It is not uncommon for one spouse to have a significant amount of debt in their name only. However, if both spouses have debts they want to discharge that they are both liable for, they should file together.\nBankruptcy Myth #4 — All Bankruptcy is the Same\n-----------------------------------------------\nThis is not true. There are two types of bankruptcies that are used for personal bankruptcy. In a Chapter 7 bankruptcy, your non-exempt property will be liquidated and used to pay your creditors. This option allows you to discharge some of your debt. A Chapter 7 bankruptcy will stay on your credit report for 10 years and it the most damaging one to your credit score.\nA Chapter 13 bankruptcy allows you to restructure your debts and follow a repayment plan. This type of bankruptcy is for those individuals who have a lot of assets and do not want to liquidate those assets to pay their debts. They are looking to restructure their debts and work out a payment plan with their creditors. This bankruptcy can last for years and will also stay on your credit report for 10 years after it is finalized.\nBankruptcy Myth #5 — It is Very Difficult to File Bankruptcy\n------------------------------------------------------------\nIt really is not that difficult and you really don't even need a bankruptcy attorney — however, it's not recommended to go through the procedure without one. Anyone can file for bankruptcy but there are limits on how often you can file for bankruptcy. You can only file for Chapter 7 once every eight years and you need to qualify to file bankruptcy by taking a means test and satisfying the requirements outlined therein.\nBankruptcy Myth #6 — Your Credit Will Be Ruined Forever After Filing for Bankruptcy\n-----------------------------------------------------------------------------------\nBankruptcy will seriously affect your credit, but the negative ramifications will not last forever. It won't be long before you can obtain a secured credit card, which will help you rebuild your credit history. Using this card for the next few years, paying your bills on time, and being careful not to run up your credit limit, will help establish some positive credit on your credit report and will help increase your credit score over the long run.\nBankruptcy Myth #7 — You Can Go On a Shopping Spree, Max Out Your Credit Cards, Then File for Bankruptcy\n--------------------------------------------------------------------------------------------------------\nDefinitely NOT a good idea! This spending spree will be considered fraud in the eyes of the bankruptcy judge. Since this could be seen as fraudulent debt and will not be discharged. END