Debunking common bankruptcy myths, part one

Although bankruptcy has grown increasingly common in Georgia and across the country, it is still largely misunderstood as a frightening, life-changing, shameful process. Of course, bankruptcy can be intimidating, and it will probably change your life in some way. Shameful, however, it is not: bankruptcy is often the product of a major life event that results in unmanageable debt, and very rarely do filers not make every possible effort to pay that debt before filing for Chapter 7 or Chapter 13.

That is just one of the common myths about bankruptcy. In an effort to bring greater understanding and awareness to the process, its causes and its consequences, we will tackle a few more below.

• Myth: I will never get credit again. Fairly soon after your bankruptcy process is complete, you will begin getting credit card offers in the mail. However, they will probably be from subprime lenders that charge high interest rates, so they are probably best to avoid. In general, a bankruptcy will be on your credit report for up to a decade. However, companies will gradually extend credit to you again, especially if it is for secured debt.
• Myth: My spouse and I both have to file for bankruptcy. This is not necessarily true. In many cases, just one spouse will have a significant amount of the couple’s debt load in their name only, and therefore only that person will need to file for bankruptcy. However, if both spouses are liable for the debt, the couple should probably file for bankruptcy together.

We will continue to discuss common bankruptcy myths next week.

Source: MSN Money, “12 myths about bankruptcy“