Bankruptcy MythBusting Series

In all of my years practicing bankruptcy law, I have heard a lot of reasons why people avoid filing for bankruptcy.  The majority of those reasons are based on false myths.  Over the next several days, we're going to explore and debunk some of the most common myths.

How do these myths get started?  Many of them come about when people, who are less educated than they pretend to be, pass off what they understand as fact.  This was rampant when the news media reported on the effects of the BAPCPA when it was pending legislation in 2005.  Many claimed that it would be impossible for anyone to file for bankruptcy once the new law went into effect.  Nothing could be further from the truth.  In fact, while BAPCPA made filing bankruptcy more complex and something of a nuisance, many have argued that it is now easier to qualify for bankruptcy, due to the arbitrary nature of the one-size-fits-all Means Test.

Most of the other myths stem from anecdotal evidence.  My neighbor Bob filed for bankruptcy and he lost his house, therefore everyone who files for bankruptcy loses their house.  Again, false.  Bankruptcy is intensely fact specific.  What happens in one bankruptcy case will not necessarily happen in another bankruptcy case.  Differences in household size, what state you live in, how much income you have, what you own, what you owe, what chapter you file under, and a plethora of other fine minutiae all coalesce together to determine the disposition of your particular bankruptcy.  Bankruptcy cases are like snowflakes - while many may look similar from a distance, no two are identical.  A competent bankruptcy attorney can review your case to determine specifically what impact bankruptcy will have on you.

Have a myth you would like to have verified or debunked?  Post a comment and I'll be sure to include it in the series.