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!

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.

Myth:

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:

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