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There are a lot of myths surrounding bankruptcy since most of us never think we will need to file and don’t know much about it until we need to find out. Let’s dispel a few of these myths:

Everyone will know I’ve filed bankruptcy – In reality, no one will know unless you tell them or they have reason to run your credit report and see it on there. Bankruptcies aren’t posted in many newspapers anymore because there are simply too many. Unless you are famous, running for a local government position, or have some other reason that the general public would be looking at your history, no one will be looking up whether or not you have filed bankruptcy.

I could lose my job if I file – It’s actually against the law to fire someone due to a bankruptcy!

The court will take all of my possessions – Even though chapter 7 is known as liquidation, they don’t take everything you own. The federal government and states have set aside bankruptcy exemptions to make important possessions like clothing, furniture, a car, retirement accounts, and lots of other property is exempt from being taken and sold in a bankruptcy, up to a certain dollar amount.

It’s extremely hard to file bankruptcy – Filing bankruptcy is surprisingly easy, you can even file on your own without a bankruptcy attorney.

I can max out my credit then file – Nope, sorry. Creditors and bankruptcy trustees consider this fraud. The last 6 months of your purchases will be carefully scrutinized, and you could be facing serious trouble if you are found to be trying to fraud the system.

Only losers and people that can’t stop spending file bankruptcy – Bankruptcy statistics show over 90% of bankruptcy filers have either lost a job, had a major medical issue with large medical bills, or gone through a divorce that forced their bankruptcy.