Avoid bankruptcy could be a motto for most financial advisers. At all times they consider bankruptcy as the final option if everything else fails. If one is rank all debt solving steps, it would go something like this, debt settlement, debt management, debt consolidation, Individual Voluntary Agreement or IVA, lastly bankruptcy.

Bankruptcy has always been lighted in the flawed side of it. And this is all for the right reasons. Most people with debts are deterred from bankruptcy if there are still other alternative. One of the ‘myths’ of bankruptcy is that all your debts will be erased. This is not a reality, because only unsecured debts will be written off after you declared for bankruptcy. Secured loans will be relatively unaffected, if on joint loans, the agency can claim the whole payment from the other debtor. Student loans will also remain. Some debts and payments due like child support, fines (of any kind), and compensation for personal injury or from criminal cases.

For those that have no other choice but to file bankruptcy, there are still some fair deals with this process. If you are just a regular employee, there are some companies that may not fire you from your job. There are companies that believe in not judging anyone because of your debts. Only those in high positions will be affected professionally. Like, accountants, directors, company partners, magistrates and those in the military and those that are in public office. 

Creditors whom you owe will no longer exert any collection efforts during bankruptcy. After bankruptcy, your creditors will not have any right to sue over those debts that were not paid during your bankruptcy. Because in reality, these creditors will only be able to get back a very small portion of the amount that you owe them.

There are still limited numbers of banks that may offer you basic accounts, if in case during your bankruptcy you would like to have one.

Another myth of bankruptcy is that you will be evicted from your homes. In reality, if you are in a rented flat or house then the landlord may not force you to leave even if some tenancy agreements restrict having an undischarged bankrupt as tenants. This is covered in automatic stays, together with blocked foreclosure proceedings.

There are a lot of myths and realities that should be uncovered deeply before anyone considers bankruptcy. Again, if there are any other options, reconsider before going bankrupt.