I keep many financial advice books and DVDs in my office library to recommend to clients, but Suze Orman is not on my list of recommended authors. When she gets things right, she can be quite good, but when she is wrong she can get it wrong.
Until Suze Orman gets a basic understanding of bankruptcy law, I won’t recommend that any of my clients read her books; at least not until they get the true facts about bankruptcy and how it works.
Orman is often mistaken about who can file for bankruptcy. This morning, she was heard on MSNBC Morning Joe saying that you “can’t” file bankruptcy in some states due to income limitations. I presume she is referring to the fact that if you make over the state median income, you have to take the Means Test to see if you will be required to file Chapter 13 bankruptcy instead of Chapter 7.
Many above median debtors are able to file for bankruptcy – both Chapter 7 and Chapter 13. She apparently never mentioned Chapter 13 bankruptcy as a potential way to save a home from foreclosure – a method that should always be at least explored if someone has any desire to keep a house. Chapter 7 provides protection from creditors and may well offer certain tax protections from charged off debts if the debtor doesn’t want to keep the home. Suze Orman often ignores the help that Chapter 13 can provide to many people whose houses are in foreclosure.
Suze Orman may recommend bankruptcy occasionally, but she doesn’t demonstrate a full understanding of how bankruptcy works or why/when it can be a benefit for person in trouble. When I hear her make statements that are clearly wrong, it appears to me that Suze doesn’t seem to grasp the benefits of bankruptcy or have a realistic view of when it might be advisable to file for bankruptcy. Suze may recommend filing bankruptcy as a last resort, but ingnores many of the benefits of bankruptcy protection.
Suze is a good speaker and preaches some good old fashioned financial and budgeting sense, but I rarely listen to her when I don’t find something that I seriously disagree with her on. If you aren’t struggling and just want to get some old fashioned financial advice, I like much of what she says.
Suze’s approach to financial freedom hinges on solid investing, living below your means, and planning ahead. But when people get in trouble and she starts advising them about how to solve problems and totally ignores or mis-quotes bankruptcy laws – watch out!
As I tell my clients: Take Suze Orman’s advice with a grain of salt. As good as some of her advice is, she is wrong about too many things to take her word for everything. At least when it comes to bankruptcy law. Hopefully she will educate herself on the truth about bankruptcy and won’t continue to give out bad information in the future.
To find out if bankruptcy can help you, contact a experienced bankruptcy attorney in your area.
by Susanne Robicsek, Charlotte NC Bankruptcy Attorney
See my articles: Seeking The Last Resort Earlier: Why Bankruptcy Should Not Be Your Last Resort November 30, 2007; and my explanation of the Means Test on my website.
I Make More Than the Median Income. Can I File for Chapter 7? by by MD Bankruptcy Attorney Brett Weiss, July 8, 2008; and
Top 15 Myths About the New Bankruptcy Law by MD Bankruptcy Attorney Brett Weiss, January 20, 2007; and
Is Suze Orman The Light Of Your Financial Future? by Kansas City MO Bankruptcy Attorney Rachel Lynn Foley
Is Walking Away From Your House An Alternative To Bankruptcy? by Oregon Bankruptcy Attorney Karen Oakes, March 20, 2008
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