While no one actually wants to file for bankruptcy, doing it is a necessary step when the time finally comes. However, bankruptcy is not that horrible as you see it in movies and TV shows. However, the image of bankruptcy is distorted because of a few misconceptions.
Today, we will clear common misconceptions about bankruptcy. This will help you decide when you feel the need to file for bankruptcy without any unnecessary fear. You should also hire a good lawyer to help with bankruptcy options.
Both You And Your Spouse Have to File
In many cases, both of the partners have a responsibility for the debt, and both of them have to file for bankruptcy. However, if one of the partners has most of the debt on their name, they will be the only one to file for bankruptcy.
But if both the spouses have a share the responsibility of debt, both should file for bankruptcy. If both of the spouses had to file but only one of them actually files, then creditors can ask the other spouse for full payment.
Your Credit Will Suffer Permanently After Bankruptcy
Another common misconception about bankruptcy is that it can damage your credit permanently. Keep in mind that while a bankruptcy can stay on your report for around a decade or so, it’s effect on your credit is not permanent. Moreover, you might actually start receiving offers for new credit cards days after your debt discharge. But these credit cards will come with low limits at first.
Your credit score can quickly recover from a bankruptcy. So, you should not worry about your credit score when filing for bankruptcy.
You Can Lose Everything in a Bankruptcy
Many people still believe that they can be left out empty-handed in the street if they filed for bankruptcy. However, this misconception is fully wrong. In a majority of bankruptcies, you won’t lose most of your property as it is exempt from bankruptcy. Filing for bankruptcy can actually benefit you in many ways.