Common myths related to bankruptcy

Do both partners in a marriage have to file? One of the most common myths that surround the institution of bankruptcy is that both spouses in a marriage are required to file. However, this is not always the case. It isn't uncommon for one partner to have the vast majority of the debt solely in their name. If this is the case, it's best for them to file independently. It is true that if debt is shared between the spouses, then both of them should file. This is because if both spouses are liable for debt and only one files, creditors can demand payment from the spouse that hasn't filed.

Does bankruptcy ruin your credit for life? One of the biggest fears that people have when filing for bankruptcy is that it may ruin their credit score. You will indeed have limited access to credit during the seven to ten years that a bankruptcy stays on your credit report. But this doesn't mean you won't start receiving limited credit card offers within weeks of your debt being discharged.

Will bankruptcy discharge all of your debt? All too many people believe that they can magically wipe the slate clean by filing for a bankruptcy. This is very rarely the case. Chapter 7 can help you deal with such issues as back rent, personal loans, medical bills, utility bills, and credit card charges. However, there are certain debts that Chapter 7 is not empowered to discharge. These may include student loan debt, child support and spousal support payments. For this reason, you must be very clear in your expectations when you make your filing.