Bankruptcy Myths Debunked

I'm married, so don't both my spouse and I have to file for bankruptcy?

This is false, both spouses do not have to file for bankruptcy. If you don't have joint debt, one spouse can file for bankruptcy to get relief from their own debt and it does not impact the other spouse's credit.

Isn't it true that you can't get medical bills discharged in bankruptcy?

No, this is simply not true. Almost all unsecured debt can be discharged in bankruptcy, but the bill collectors won't tell you that. In fact, they are in large part the reason for this myth. Medical bills, credit card debt and other unsecured debt can all be discharged in bankruptcy.

Taxes from prior years are not dischargeable in bankruptcy.

This is also false. If you meet certain qualifications, back taxes including federal, state, personal property, local and inheritance taxes can be discharged or mitigated in bankruptcy. Again, bankruptcy relief is available for back taxes once certain qualifications have been met. It is a simply untrue blanket statement that all back taxes are not dischargeable in bankruptcy.

A bankruptcy on your record will make it impossible to get credit in the future.

On the contrary, most people who have filed for Chapter 7 bankruptcy soon get overwhelmed with offers for credit cards soon after their debts have been discharged in bankruptcy. Many of our clients have successfully applied for loans and mortgages in as little as 2 years after their discharge. The interest rates offered to them may not be the best, but after a couple of years of making payments on time, their credit scores rise again, and their creditworthiness makes them eligible for low interest rates.

For more information about bankruptcy myths and how we can help you get a new start financially, please contact us for a consultation.