1. An individual must be completely broke to file for bankruptcy.
This just isn't true. The bankruptcy code is written so as to not leave an individual with nothing, because they would then likely become wards of the state. With that in mind however, there are limits as to how much you can keep. The best way to know what is exempt, and what is not is to contact a bankruptcy attorney in your area. Other than a few limited exceptions, the only requirement to file for bankruptcy is that an individual cannot pay their bills when they are due.
2. If I file for bankruptcy I will never be able to get credit again.
A bankruptcy filing will appear on a credit report for 10 years which will limit the options for receiving credit, but credit can be rebuilt. Further, most individuals considering bankruptcy already have poor credit ratings, therefore filing bankruptcy is a good start towards rebuilding their credit.
3. If I file for bankruptcy I will never be able to buy a house.
This is also wrong. Now the lender may ask for some additional guarantees and it may be more difficult, it is not unheard of. Like all lenders, mortgage companies weigh the risk of the loan against the reward. So while interest rates may be a bit higher, or a more sufficient down payment may be required, a mortgage can be obtained once the credit is rebuilt.
4. I will lose my car if I file for bankruptcy.
Yes and no. While it all depends on the amount of equity one holds and the exemptions available in their case, many debtors are able to retain their vehicles. In order to be certain about the car, one should consider obtaining a consultation with an attorney who specializes in bankruptcy law.
5. If I file for bankruptcy I will lose my job.
This is not true. The law is very clear that an employer may not terminate an employee solely because they filed for bankruptcy. If an individual were able to prove that the filing of bankruptcy were the sole reason for termination of employment, that person would be able to file a lawsuit against the employer. However, a potential employer can use the filing of bankruptcy as a factor to consider whether to employ someone, it just cannot be the sole factor.
So now that you know all five of these things that you have heard about bankruptcy aren't true, what is? The best way to find out is to contact a bankruptcy attorney in your area and ask for a consultation. They will be able to explain to you the truths about bankruptcy, the process of bankruptcy, and whether or not bankruptcy is a good option for your situation.