MYTH: Filing for bankruptcy will ruin my credit.

FACT: For the vast majority of people, filing for bankruptcy actually improves their credit rating. Having a bankruptcy on your credit report does have a negative effect on your overall score, but the boost you’ll get from eliminating the debts you cannot afford will far out-weigh the negative consequences.

MYTH: After I file for bankruptcy, I will not be able to get financing for a home or car.

FACT: With 2 million Americans filing for bankruptcy every year, creditors can’t afford to exclude such individuals from having access to their services. You may pay a higher interest rate in the beginning, but taking on manageable debts slowly is a great way to rebuild your credit and move on with life.

MYTH: I’m married, so if I want to file for bankruptcy, then my partner will have to as well.

FACT: A marriage alone does not mean that both individuals must file bankruptcy. The deciding factor should be whether or not both partners are liable for the debts that you are unable to

pay. Joint assets and debts are just that, so not filing together will leave one person responsible. If, on the other hand, one partner has large outstanding debts in their name only, then it would make sense for just that individual to file.

MYTH: Everybody is going to know that I filed for bankruptcy.

FACT: While basic information on every bankruptcy case is part of the public domain, it is highly unlikely that anyone you know, besides your attorney and creditors, will find out that you’ve file for bankruptcy - that is, of course, unless you tell them.

MYTH: I will lose my job or have trouble finding a job if I file for bankruptcy.

FACT: You cannot be fired from a job for filing bankruptcy and it is unlikely that any employer or potential employer will even know that you’ve filed. Actually, filing for bankruptcy could help you get a job; it speaks to your character to say that you took control of a situation that was spinning out of control and in the end improved conditions greatly.

MYTH: If I file for bankruptcy, I will lose my 401K and other retirement savings.

FACT: Certain assets are exempt when filing for bankruptcy, meaning they can not be sold and/or used to pay of debts. In Michigan, you are able to retain up to $1million in retirement funds.

MYTH: Filing for bankruptcy means I will have to give up my house, car, and/or business.

FACT: Just like retirement funds, your home, vehicle, business, and household and other items are exempt. Michigan law even allows you to keep up to $10,000 in cold, hard cash.

MYTH: All of my debt will be gone after I file for bankruptcy.

FACT: Some debts cannot be discharged through bankruptcy. These include spousal and/or child support, any other fines and/or restitution payments ordered by a court, income taxes less than 3 years past-due, student loans, and property taxes. Liens against your home and/or car will also survive bankruptcy, so in order to keep your property you must keep making payments on these liens.

MYTH: If I transfer property or other assets to a relative or friend, then I will not lose them when I file for bankruptcy.

FACT: Transferring assets before you file for bankruptcy can be seen as bankruptcy fraud and can prevent you from being able to clear any of your debts.

MYTH: Renegotiating my mortgage is the best way to prevent foreclosure.

FACT: Bankruptcy is the only legal way to stop creditors from taking actions again you. Creditors must stop all harassment, repossessions, foreclosures, wage garnishments, and interest and fee accumulations as soon as you file your petition for bankruptcy.The court will notify all of your creditors within a few weeks, if that is not soon enough, you or your attorney can inform them immediately upon filing your petition.

Bankruptcy is a legal tool that every US citizen and company has the constitutional right to utilize. Don’t let big corporations be the only beneficiaries of bankruptcy law!