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Like most big, bad scary things, bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment. And like most creepy crawlies, it's not nearly as frightening once you know the truth. 12 bankruptcy myths With a mind toward declawing the monster, here are a dozen misconceptions about bankruptcy: 1. Everyone will know I've filed for bankruptcy. 2. All debts are wiped out in Chapter 7 bankruptcy 3. I'll lose everything I have. 4. I'll never get credit again. 5.