Myths are very common when it comes to matters of finance, particularly bankruptcy. Myths are often born of misunderstanding, misinformation and incorrect assumptions, so Australian Bankruptcy Services (ABS) have done their research to help bust these common bankruptcy myths once and for all.

Myth 1: I Will Lose All Of My Property If I File For Bankruptcy

This is not always true for every person, or every property. If your portion of the available equity in a property is enough to warrant it being sold for the purposes of putting funds toward your bankrupt estate, then yes, you will lose it. But if there is no available equity, or if you have a spouse or family member who can purchase your share of the equity, you may be able to keep that property.

Myth 2: My Credit Will Be Terrible Forever

The record of your bankruptcy will stay on your credit report for 7 years, but this does not mean your credit borrowing abilities will be tainted forever. If you rebuild your credit file and use your credit wisely after bankruptcy, you could even purchase a home within a few years.

Myth 3: People Will Look Down On Me If I File For Bankruptcy

This is often not the case, as more often than not people are not aware of your bankruptcy unless you tell them about it, or they go out of their way to check the public record (which is not very common due to difficulty and costs). In addition, bankruptcy is becoming more and more common these days, and so is not looked upon the same way as it was in the past.

Myth 4: I Will Be Fired If I File For Bankruptcy

Unless you have a specific clause in your employment contract stating that you will lose your job if you declare bankruptcy (which can be the case with certain fields and positions), this is incorrect. There have been laws put into place which prohibit you from being fired solely based upon filing for bankruptcy. If you suspect this has taken place, you may file for unfair dismissal.

Myth 5: I Can Charge As Much As I Want On My Credit Cards Before Filing For Bankruptcy

You should not be using your credit cards if you know that you are going to file for bankruptcy. This would be considered a type of financial fraud. If you do, credit card companies could take you to court to have the judge rule that the debt is not discharged in your bankruptcy. You could also be penalised under the Bankruptcy Act.

Bankruptcy can be complicated and to understand the truths from myths youshouldonly speak to experts in the field. Our consultants have years of experience in providingbankruptcy advice, and our company is run by a Registered Trustee in Bankruptcy. Call the Australian Bankruptcy Service today on 1800 462 767 and ensure that it is going to be the right decision for you and your financial needs.