New Jersey residents who are facing financial challenges might consider bankruptcy but are dissuaded by misconceptions about it. Dismissing bankruptcy out of hand before gathering accurate information is often a mistake. Learning the facts is essential to knowing whether bankruptcy is the right step.

Some of the most common beliefs about bankruptcy are wrong. For example, many people think that a married couple must file together. This is only true if the debt is shared. If only one spouse is responsible for it, then that is the spouse who should file.

Credit scores will be damaged by bankruptcy. Still, credit can be rebuilt relatively quickly despite a bankruptcy being on the credit report for up to 10 years. New credit cards may be secured or have a high annual percentage rate, but it is a way to accrue good credit.

People could be reluctant to file for bankruptcy because they are concerned that it will cast them in a negative light as being financially irresponsible. Certainly, people make mistakes, but bankruptcy may stem from medical emergencies, job loss and unexpected problems. There is nothing to be ashamed of.

Preparing to file for bankruptcy does not mean that a person should make major purchases beforehand thinking they will not need to pay. Bankruptcy courts will notice this, and it could hinder the case. In addition, people should understand that not all debt can be discharged in a bankruptcy. With Chapter 7, most unsecured debt will be cleared. That includes credit card debt, medical bills, loans and more. Child support obligations and student loan debt are not dischargeable.

Widely misplaced beliefs include thinking that either nothing or everything will be lost in bankruptcy. Neither is accurate. With a Chapter 7, people can keep certain properties. Chapter 13 allows them to retain a home, automobile and more if they make their payments on time. Those who have filed in the past can file again if they need to do so within time constraints.

Bankruptcy does not have to be a stressful process with the right guidance. Having advice from those experienced in bankruptcy law may help individuals to move forward in reaching stronger financial ground.