Contrary to Michael Scott's opinion, you can't declare bankruptcy by simply saying it in public!
But that is not the only Bankruptcy Myth that is going around. It is important to know which Bankruptcy Myths are true and which ones are just plain silly! Here are 4 common myths that are absolutely NOT TURE!
Myth #1: You Can Only File Bankruptcy Once
You CAN file bankruptcy more than once. In fact:
• You can receive a discharge from a Chapter 7 Bankruptcy once every 8 years
• You can receive a discharge from a Chapter 13 Bankruptcy every 2 years
Also, if you complete a chapter 7, you must wait 6 years before filing a chapter 13. And if you complete a chapter 13, you must wait 4 years to obtain a chapter 7 discharge.
Myth #2: A Bankruptcy Hurts Your Spouse
If you’re married, filing bankruptcy doesn’t affect your spouse’s credit. However, if you’re struggling to pay debt that’s in both of your names, then you should file bankruptcy together. Otherwise, creditors will simply demand payment for the entire amount from the non-filing spouse.
Myth #3: You Can Go to Jail if you Don't Pay Your Debts
No matter what anyone says—especially an aggressive debt collector—it’s not against the law to owe money. There is no such thing as debtor’s prison in the United States.
Creditors can sue you, take you to court, lien your property, and garnish your wages, but they can’t send you to jail. You can only be arrested if you commit a crime, like fraud, hiding property to avoid a judgment, or refusing to pay income tax.
Myth #4: Bankruptcy is Expensive
The filing fees for chapter 7 and 13 bankruptcies vary, but aren’t more than $300. The real expense is hiring an attorney, which could range from $2,000 to $4,000, depending on the firm and the type of bankruptcy you choose. You can file bankruptcy without an attorney, but I don’t recommend it. A less expensive option is to hire a bankruptcy paralegal. They can do everything an attorney can do, but usually charge much less!
While bankruptcy may be inevitable for you, there are other options that can help you to eliminate your debt without filing bankruptcy. Debt Consolidation and Debt Settlement are some of the choices you have when you are struggling to pay your debt. For more information, click on the link below or ask a question in the comments section at the end of this post!