Beware of Misleading Bankruptcy Information From Non-Lawyers

You think you might need to file bankruptcy, so you get on the internet to find out as much as you can in order to help you make a decision. Beware!! Not all the information you find will be accurate. Misinformation from authors who claim to be experts, but who have no special training, can be disastrous, especially relating to legal topics.

Bankruptcy law is extremely complex, and has twists, which even many long-time practicing bankruptcy attorneys have not seen. Because of this complexity, it is important that you seek information and advice from an actively practicing bankruptcy attorney when attempting to learn what your rights and responsibilities are.

A prime example of misleading information is found in the well-meaning, but inaccurate article by Natalie Aranda, Simple Steps for Filing Bankruptcy and Getting Fast Debt Relief, published on February 23, 2007. One misleading statement in this article is: “A Chapter 7 bankruptcy will leave you with no assets but all your debt will be wiped out.” This simply isn’t true. Most states have fairly generous protections (exemptions) for a person’s assets, and every state has exemptions for at least some assets a person filing bankruptcy might own. Additionally, there are some debts, such as certain taxes, child support, student loans, and debt incurred through fraud which Chapter 7 bankruptcy cannot wipe out. This is example of of non-dischargeable debt, and not a complete list. (See Archive for the ‘What Can And Cannot Be Discharged’).

Ms. Aranda makes another inaccurate statement when telling the reader that filing fees are $200 for a Chapter 7 bankruptcy, and $185 for a Chapter 13 bankruptcy. In reality, filing fees have not been that low for many years. Currently the filing fees are $299 for a Chapter 7 bankruptcy and $274 for a Chapter 13 bankruptcy. (See Bankuptcy Filing Fees – effective April 9, 2006). While there is probably no danger in believing misinformation regarding filing fees, it could come as a surprise when you learn that the cost is very different from what you had read prior to filing a case.

Another example of misleading information on the internet is an article published by Martin Rogers, Nevada Bankruptcy, Following the Rules, on February 22, 2007, which inaccurately states that “a debtor has to receive 180 days of counseling from a non-profit credit counseling company before filing…” The correct information is that you must meet with a credit counselor at an approved credit counseling agency not more than 180 days before you file bankruptcy. This is true in every state. The meeting with a credit counselor can take anywhere from one hour to two hours, depending how complex your situation is, or how many questions you have regarding a debt management plan which may be offered by the credit counseling agency.

The articles mentioned above are just two articles of a myriad of articles and blogs regarding bankruptcy which can be found on the world wide web. Although Ms. Aranda and Mr. Rogers claim to be bankruptcy experts, it is clear that they are not practicing bankruptcy attorneys, given that they are misinformed about some of the fundamental aspects of bankruptcy. Information from such individuals, while perhaps well-meaning, could cause a person to make decisions that can lead to a disastrous result in his or her bankruptcy.