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  • Writer's pictureDaniel Rodriguez

Some major myths concerning bankruptcy

Married couples must both file One major misconception about bankruptcy is that married couples must file together when one spouse needs bankruptcy protection. While there may be some complications for married filers, these situations generally do not apply in many cases.

All debt is discharged Another misconception about bankruptcy petitions is that all debt will be discharged. This is also a myth because there are certain debts that cannot be discharged for any reason. Most discharged debt is done through a Chapter 7 filing that can also require the trustee to sell non-exempt property.

Personal credit ratings are permanently affected Credit ratings are affected by a bankruptcy filing, but borrowing restrictions in general are temporary until the petitioner can rebuild their credit over time. Bankruptcy begins the rebuilding process, and some lending agencies are primarily concerned with ability to pay for those going forward because the primary restrictions associated with bankruptcy is being ineligible for filing again for the next seven years. There are other myths regarding bankruptcy that potential California petitioners should also research when evaluating whether or not to file. Preparation for bankruptcy can be as important as the actual filing itself, and knowledge of the process is important before filing.

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