There are a lot of misconceptions about bankruptcy. Here are just a few:
MYTH: An employer can fire me or refuse to hire me because I file for bankruptcy.
FACT: The bankruptcy code specifically states that an employer CANNOT discriminate based on a prior bankruptcy filing.
Pursuant to Section 525(b) of the Bankruptcy Code: "No private employer may terminate the employment of, or
discriminate with respect to employment against, an individual who
is or has been a debtor under this title..."
MYTH: I don't NEED to file for bankruptcy. I don't have anything for my creditors to take.
FACT: There are several instances where a creditor can take up to 25% of your wages and/or freeze your bank account. Creditors can also place a lien on your home or take your car. Bankruptcy protects you from your creditors.
MYTH: My credit will be ruined for 7 years.
FACT: Although the bankruptcy filing will appear on your credit report, you begin to build credit from the day your case is filed. Bankruptcy gives you a fresh start, and because your debt is eliminated or significantly reduced, your "debt to income ratio" is greatly improved. A large part of your credit score depends on your "debt to income ratio."
MYTH: I am applying for citizenship and if I file bankruptcy it will prevent my getting citizenship.
FACT: Filing bankruptcy does not affect your citizenship application or process.
MYTH: I owe money to the IRS and that amount will not be discharged if I file bankruptcy.
Fact: No, bankruptcy does provide that certain IRS debt is dischargeable. You should always get a professional analysis of your IRS debts to determine whether some or all can be discharged.
MYTH: I may be getting a divorce and I want to know all of my debts I am liable for first, before I file for bankruptcy.
FACT: Most often it is better to file for bankruptcy BEFORE the divorce. Debts you assumed in a marital settlement agreement may not be dischargeable if you file bankruptcy. It is best to speak with an experienced bankruptcy attorney ahead of time to determine what would be your best course of action
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