Lie Number One – Bankruptcy will ruin your credit forever! Let’s face it, the majority of people considering bankruptcy already have bad credit. They have defaulted on personal debt such as credit cards and are delinquent on essentials such as their mortgage. For many, filing bankruptcy will actually improve their credit score by bringing their collection balance to zero through a bankruptcy discharge. And after bankruptcy many creditors are eager to court debtors who have received a Chapter 7 bankruptcy discharge.Lie Number Two – You need have a lot of debt to file bankruptcy! The truth is that you don’t need to be millions of dollars in debt to benefit from bankruptcy. It all depends on how much debt you owe, compared to your income. Someone who earns $12,000 a year may need to file bankruptcy if they owe $10,000. But that $10,000 in debt would be easily repaid by someone earning $100,000 a year. It’s all relative.
Lie Number Three – Filing bankruptcy will destroy your spouse’s credit! Under the Equal Credit Opportunity Act, married couples are not required to have joint credit or file bankruptcy together. You can file bankruptcy without involving your spouse and your bankruptcy will not show up on their credit report.