For the majority of consumers struggling with financial difficulties, it is unlikely that they share with friends and family their questions or fears about bankruptcy. In this article, we will shed light on the six common myths about bankruptcy.
1. If I declare bankruptcy, all my friends and family will know. It is likely that only your creditors will be aware of your bankruptcy. Unless you tell your loved ones, they will not be informed.
2. If I declare bankruptcy, I will never be able to get credit again. Several factors are considered to determine whether a person can get credit. Bankruptcy is a negative factor, but it is possible to rebuild your credit quickly.
3. If I declare bankruptcy, my income tax debt will not be eliminated. In bankruptcy, all your debts are erased but some exceptions. Income tax debt is not an exception and will be also eliminated.
4. If I declare bankruptcy, I admit my failure. Several reasons lead to debt problems (loss of income, illness, misfortune, separation, lack of information), however, the most important is to make a decision and rebuild. Bankruptcy does not mean to flee our responsibilities, but rather the opposite.
5. If I declare bankruptcy, I will lose everything I own. The Bankruptcy Act ensures that people who need bankruptcy do not lose their necessary properties such as household furniture, personal effects and, in some circumstances, their homes.
6. An appointment with a bankruptcy trustee means filing for bankruptcy. Not necessarily! A trustee is a professional able to assess the financial situation of an individual and to present the available options according to their specific situation. Bankruptcy is not the only solution. Consult a bankruptcy trustee before it is too late.
