7 Misconceptions About Bankruptcy and What You Need to Know

Filing for bankruptcy can be an uncomfortable thought. There’s a certain negative stigma that goes along with it, and for this reason, many people struggle with the decision to file more than they need to. Even though bankruptcy might not seem like the best financial decision, there are many benefits that you may not be aware of. Let’s take a look and clear up seven of the most common misconceptions about bankruptcy.

1. You Don’t Qualify for Bankruptcy

Many people don’t file for bankruptcy because they believe they will not qualify for it. That’s not true. Anyone can file for bankruptcy; however, the steps required to file will vary from case to case.

If you file for a Chapter 7, then a ‘means test’ will be conducted. A means test is used to determine a person’s financial means as they file for bankruptcy. The test takes into consideration your income and whether your income is sufficient to handle your debts.

If you fail the means test, you can always file for Chapter 13, which will allow you to pay back what you owe over a specific time period.

2. Filing for Bankruptcy Means You’re A Failure

It’s easy to feel like you’ve failed when you file bankruptcy. This couldn’t be further from the truth. Filing for bankruptcy means you’ve taken responsibility for your life and your financial decisions. Instead of feeling embarrassed or ashamed, feel proud that you’re taking steps toward a better financial future.

Many people worry about others finding out about their bankruptcy. Remember, filing for bankruptcy is your business and taking care of your financial health is more important than what others think about you. Don’t let how others feel about bankruptcy prevent you from taking control of your own financial situation.

3. You’ll Have Everything Taken Away

No one is going to come into your home after you’ve filed for bankruptcy and take all of your belongings unless you are surrendering that property. There are exemptions based on the value of certain things in your home. The items exempted will be determined by the state of Arkansas.

4. All of Your Debts Will Be Cleared

Even though Chapter 7 and Chapter 13 bankruptcy will help a person clear of most of the debt they owe, not everything will be cleared.

For example, a bankruptcy filing will not clear student loan debt.

5. You Won’t Ever Be Able to Get Credit Again

Not true.

You might be afraid to file for bankruptcy because you think you won’t ever be able to get credit again. Although a bankruptcy will appear on your credit report for up to 10 years, this shouldn’t stop you from seeking credit. Click here for more information on our 7 Steps to 720 program.

It’s true that a bankruptcy may hinder your application for credit at certain institutions, but you shouldn’t allow this to stop you from trying. There are certain credit cards you can get for people who have poor credit. Then you can build it up from there.

Proper planning is also key when establishing new credit and moving your financial situation forward. If you speak to a professional before you make any decisions, they will help you choose the best path for your specific situation.

6. You Cannot File for Bankruptcy If You’re Married

You may think you can’t file for bankruptcy because you’re married, but the truth is, you can. Marriage has nothing to do with your ability to file for bankruptcy and shouldn’t stop you from moving forward.

If you’re married, you can file by yourself, or you and your spouse can file together. If you have a lot of personal debt, then it may be a good idea to file by yourself. On the other hand, if you have a lot of joint accounts, then filing together may be the best course of action.

7. You May Go to Jail

Some people hesitate to file bankruptcy because they believe they may end up end jail. If everything you claim during your filing is truthful, then there is nothing to worry about on your part.

Be honest and you won’t go to jail. There is no such thing as debtor’s prison.


Bankruptcy shouldn’t be viewed as a “bad” thing. If you’re contemplating it, then it might be the best decision you can make for you and your family to get a fresh start. Mr. Crawley can inform you of your options and help you decide whether filing for bankruptcy is the right decision based on your situation during a free initial consultation.

You don’t have to be ashamed about filing for bankruptcy if it’s what you need to do to get your life back on track. Call us today to set up a time to speak with Mr. Crawley in person or over the phone, so you can make the right decision and preserve your credit rather than ruin it.


Crawley Law Firm, PA

Customer Reviews

Debbie V. 03/20/2023

Great experience very fast wonderful people to work with.

Shannon W. 03/21/2023

Professional, Helpful, and Kind. I would recommend to anyone. Thank you

Tanya 2/15/2023

Mr. Crawley and the staff were very kind and knowledgeable to me during my Bankruptcy period. They did an awesome job. They were quick to respond to all messages, calls, and inquires. I would definitely recommend Crawley Law Firm to anyone in need of help with your legal issues.

Casey 02/08/23

Mr Crawley and husband staff were very kind and knowledgeable to me during the trying time that is bankruptcy. They were quick to respond to all messages, calls, and inquires. I recommend them to anyone in need of help with your legal issues.

H Barnes

Awesome. Answered every question each time all the time. Be prepared when you walk into his office because they're already waiting to tackle your issues. Good staff too. This lawyer gets this thang done. Have your ducks in a row.. They will help you all the way.

Mr. and Mrs. Dowdy 08/19/2022

We want to personally thank Mr. Crawley and his staff for everything. We want the whole office know we appreciate each of you for being kind and having patience with us throughout the process.

C. Henley

I have been struggling with coming to this decision to file bankruptcy, but you have made me feel comfortable through this process! Thank you for being so great with clients! You are a rockstar in my book! This is terrifying but you all have made it better! Thank you for all your help!!

Terri B. 01/20/22

I would definitely recommend Crawley Law Firm. They were informative and very patient all the way through. I could always call with any other questions. Juliana was great! Michael and all of his staff were very professional and understanding all the way!

Robert N. 01/17/22

Very responsive very respectful, and competitive on price. Always answered my questions with honor. Thanks Crawley team.

Sherry S. 01/12/22

Awe ty for always making me feel better. You are good people and I can't tell you how every single thing u have ever said or done u and ur hubs has helped us in some way. And this bankruptcy stuff is serious and ya'll take such good care of us and we appreciate you!