Rick Vaughn, Categories: There is a lot of misinformation that is spread around these days regarding Bankruptcy. I have heard some off-the-chart stuff from some of the debtors that I have spoken with. Here are my top three favorite myths about bankruptcy that I hear the most and how they are flat out “stinkin thinkin” as my father would say.
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•1. Filing for bankruptcy will improve my credit: I know you think I’m kidding but some people actually believe this. Filing for bankruptcy is the worst ‘negative’ you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for 10 years.
•2. I can max out all my credit cards, file for bankruptcy and never have to pay. This is fraud, people. I tend to believe bankruptcy judges are wise to it at this point. In addition, the trustee in your case will review all your purchases right before your filing. They know what to look for and while some instances may slip through the cracks, the vast majority will get dismissed if there any signs of attempted fraud.
•3. All debts are wiped out in Chapter 7 bankruptcy. Not even close! There is still debt that you will be forced to pay. This includes child support and alimony, student loans and any debts incurred as the result of fraud. It’s also very unlikely that a judge will discharge legal settlements you’ve been assessed, such as money you’ve been ordered to pay to someone who sued you.
The TRUTH is bankruptcy is not a level you want to reach. I know there are people out there that think it’s as easy as filing some paperwork without realizing the intrusiveness of the whole ordeal. Bankruptcy is a life-changing event and should be used as a very, very last resort. Starting over just might not be all it’s cracked up to be.
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1 Comments until now.
This story sounds convincingly! I agree with you in this case.
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