Financial difficulties can affect anyone, regardless of their income level or how carefully they manage their finances. Unexpected events like job loss or medical emergencies can quickly lead to overwhelming debt, even for those who have been financially responsible. In such circumstances, bankruptcy can provide a legal solution to manage and potentially eliminate overwhelming debt, offering a fresh start. While over half a million people file for bankruptcy annually, misinformation and stigma associated with bankruptcy deter many from considering this option.

If you’re considering filing for bankruptcy, it’s in your best interest to contact our knowledgeable Gillette Bankruptcy Lawyers, who can help you make informed decisions about your financial future. Please continue reading as this blog debunks common bankruptcy myths. 

What Are the Top Bankruptcy Myths?

First and foremost, it’s important to understand that bankruptcy laws are designed to provide relief from various types of debt. It’s crucial to understand that bankruptcy is not a sign of personal failure but rather a legal tool that can be utilized to address overwhelming financial challenges. By dispelling the myths surrounding bankruptcy, those struggling can make informed decisions about their financial well-being. Some of the most common myths individuals falsely believe about bankruptcy include:

  • Bankruptcy permanently kills your credit: Contrary to popular belief, bankruptcy will not terminate your credit. While bankruptcy will remain on your credit report for seven to ten years and limits your access to credit, it won’t permanently damage your credit. You may be able to get a secured credit card with a low limit within weeks after your debt is discharged.
  • Bankruptcy discharges all debt: Despite providing a fresh start by discharging various unsecured debts like personal loans, utility bills, credit card charges, medical bills, and back rent, it doesn’t eliminate all debt. Certain debts, such as child support, spousal support, and mist tax obligations, cannot be discharged through bankruptcy.
  • Bankruptcy filers are financially irresponsible: It’s a common misconception that bankruptcy filers are reckless spenders who don’t know how to manage their finances. However, more often than not, bankruptcy is the result of stagnant wages and an unhealthy economy rather than poor financial management.
  • Married couples will both have to file: You and your spouse don’t technically share liability for all debts accrued by one spouse. That said, if one spouse is liable for debt, both spouses don’t have to file for bankruptcy.

Keep in mind that these are only a few of the many misconceptions about bankruptcy. If you’re considering filing for bankruptcy, please don’t hesitate to contact an adept lawyer at 307 Bankruptcy, who can guide you through each step of this complex legal process. Connect with our firm today to learn how we can help you get your life back on track.