You’ve probably heard this—or even thought it yourself. But here’s the truth behind common bankruptcy myths:
“I can’t file bankruptcy—everyone will know!”
No one will know you filed for bankruptcy unless you tell them. It’s not posted in the newspaper or online. There are companies that comb public court filings and may send you offers for credit after you file—just throw them away. The general public cannot easily look up a bankruptcy case unless they physically go to court or pay for a subscription to court docket software.
“I can’t file bankruptcy—I’ll never get credit again!”
That’s not true. Most people can get credit cards at a reasonable interest rate within 2–3 years after discharge. You may even qualify for a secured credit card much sooner.
“I can’t file bankruptcy—it will destroy my credit score!”
If you’re behind on payments or maxed out on cards, your credit score has likely already dropped. After filing bankruptcy, your debt-to-income ratio improves. Many people see their score start to go up just a few months after discharge.
“I can’t file bankruptcy—I’ll never get a job in my field because of credit checks!”
In many cases, having large unpaid debts and late payments on your report can look worse to an employer than a bankruptcy discharge. Filing bankruptcy improves your financial profile by reducing your debt-to-income ratio, which can actually make you more favorable for employment or rental applications.
“I can’t file bankruptcy—I won’t be able to replace my car!”
Car dealerships may approve financing the day after you receive a Chapter 7 discharge—though the interest rates will be high, and you must prove income. Some dealers will even approve financing before your discharge. If you file Chapter 13, you can replace your car with court permission.
“I can’t file bankruptcy—I’m a good person who always pays my bills!”
Bankruptcy laws were created by Congress to help people recover from financial hardship. Maybe you lost a spouse, a job, faced a serious illness, or had to leave work to care for a loved one. Even if you simply got in over your head, the law is there to help. Using it doesn’t make you a bad person—it makes you someone who needed help.
You’ve heard the fears. You’ve had the worries. But don’t let myths hold you back. Bankruptcy can be the beginning of your financial recovery.