10 bankruptcy myths debunked|
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."
Myth No. 6: Filing bankruptcy
could cost you your job.
Technically, this is not true.
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
"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
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.
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
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,"
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.