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Top 10 bankruptcy myths debunked
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He explains that marriage overall is handled differently from other joint accounts. "For example, say a sister files for bankruptcy, provided the brother continues to pay off the account, the brother will not be affected by the bankruptcy."

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Myth No. 6: Filing bankruptcy could cost you your job.
Technically, this is not true.

Bankruptcy experts say a current employer can check an employee's or potential employee's credit report provided they have the employee's written permission.

Employment lawyer Linda Correia of Webster, Fredrickson & Brackshaw in Washington, D.C., says that a statute under the bankruptcy code prohibits discrimination against an individual who is or has been a debtor.

"However, it prohibits an employment action 'solely' because the individual is or has been a debtor. Courts have interpreted this language very strictly, however, so if the employer proves that one or more other reasons for the action also were at play, and not solely the bankruptcy, the employer prevails," says Correia.

Myth No. 7: Purchasing a home and obtaining new credit after a bankruptcy is out of the question.
According to Haggag, creditors and lenders will look at a consumer's most recent credit history more than the past.

"Each lender varies in their business practices. However, the length of time since the bankruptcy was filed is often taken into consideration by lenders," says Haggag. "Also, most lenders will factor in other items, such as length of time in current employment, income, etc., along with the credit history, in order to make a decision."

Myth No. 8: A consumer can choose whether to include all their debt in a bankruptcy filing.
Bankruptcy experts stress that all debts must be listed. Misinformation or neglecting to include certain debts can lead to additional cost and the possible dismissal of the bankruptcy case.

Myth No. 9: Late payments on a credit report are just as bad as filing for bankruptcy.
While late payments are frowned upon, they are not viewed as negatively as a bankruptcy filing. "The late payment will be deleted from the credit report after seven years has passed," says Haggag.

Myth No. 10: A spouse can proceed with filing for joint bankruptcy without getting the other's permission.
Bankruptcy experts say both spouses must give permission for the filing of a joint bankruptcy.

Bankrate.com's corrections policy -- Posted: Jan. 13, 2006
 
 
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