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Research: Busting Myths about bankruptcy - Credit-Land.com

There are a number of rumors about bankruptcy no matter whom you ask. The issue about something like bankruptcy is that a person who has been through it is not likely to be in a mood to talk about it and those people who haven`t been through it are always extra anxious to help out someone who is on the verge of filing for one. There are a few myths that it might be worth taking a look see before filing for bankruptcy.

Leave some debts - it is not possible to leave out any debt from the filing. According to law, you are required to completely reveal everything about your financial situation. This will include information about your assets, your debts, your creditors and also your sources of income. If you hide anything during the filing, criminal charges can and will be initiated against you if they are discovered later on.

It is a tool to eliminate all debts - most of your debts can be removed completely. But there will still be a few which cannot be touched. These can include your student loans, child support funds, fines and penalties due to crimes committed by you and lastly a few taxes.

Bankruptcy is only for poor people - this is definitely not true. People who file for bankruptcy are in most cases richer than me and you. Anyone can file for bankruptcy according to law. it can include an individual, a company, a proprietorship, an organization or even a partnership. The only reason why a person would go for a filing would be when they fail to repay the debts they owe to their creditors. Anyone could be in such a situation and do not be under the impression that it will not happen to you, you can never predict in the current global economic crisis!

Unavailability of financing in the future - it is true that when you file for bankruptcy, your financial credibility suffers badly. In fact your credit record will be tarnished for the next eight years. But that does not mean that you will not get any sort of financing in that period. You can still approach certain unsecured lenders or financers who will offer loans without checking your credit history. The interest rates will obviously be higher but if you really need a loan this might be the only way of securing one under the circumstances.

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