Bankruptcy Myths You Need To Know

You might have heard that bankruptcy gives you a clean financial slate, but that’s not exactly accurate. For those experiencing serious financial distress, bankruptcy can be a way to eventually restart. 

Depending on your financial situation, you can get rid of debts or restructure them. But this doesn’t give you a clean slate, especially on your credit report. 

Here are some common bankruptcy myths along with the real truth of what to expect if you file!

It depends on what type of bankruptcy you file. Chapter 7 is a public record that can stay for up to 10 years, but chapter 13 might only stay for 7 years.

Myth: Bankruptcy ruins your credit forever—or at least an entire decade 

Myth: A clean credit history & a high credit score means you’ll be less impacted by a bankruptcy 

Bankruptcy will have a huge negative impact on your credit, and a previously positive payment history doesn’t change that.

The Truth:

You might as well not even try because you’ll have poor or bad credit as long as the bankruptcy is on your record.


Yes, bankruptcy tanks your credit score in the short term. But how much a bankruptcy impacts your credit score depends in part on how old the record is.

The Truth: