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Misconceptions about bankruptcy prevent many people from relieving themselves of debt they can no longer pay. If you struggle with credit card bills and worry about losing your home, bankruptcy may be a route worth exploring. 

These are the truths behind four of the most pervasive bankruptcy myths. 

“You will lose assets if you file for bankruptcy” 

In fact, most people who file Chapter 7 or Chapter 13 bankruptcy keep their homes, cars and other possessions. States and the federal government offer a list of property you can exempt from your filing. The court may require you to sell assets beyond the exemption threshold to pay debt. 

“Bankruptcy erases all debts” 

Certain debts are not eligible for bankruptcy discharge, including student loan debt, past-due child support, spousal support, payment for criminal restitution and tax debt accrued within the past three years. In addition, if you exceed the income for a Chapter 7 bankruptcy, you will repay a portion of your reorganized debt with a Chapter 13 filing. Personal loans, credit cards, medical bills and other unsecured debts are generally eligible for discharge through bankruptcy. 

“Bankruptcy will affect my reputation” 

Even though bankruptcy filings are public record, they rarely become news unless the person is a well-known figure or official. Your friends, family members and colleagues will likely only know that you filed for bankruptcy if you share that information. 

“I will be unable to qualify for new credit for seven to 10 years” 

Although a bankruptcy filing remains on your credit report for seven to 10 years, you will likely qualify for new credit much sooner. Most people who file for bankruptcy report receiving credit card offers within weeks or months after their case. Using new credit responsibly can help you rebuild your score. In addition, most mortgage lenders will consider you for a home loan within about three years of your bankruptcy filing. 

Talking with a bankruptcy attorney can help you understand the laws in your state and learn whether bankruptcy is the right solution for your debt.