19 Jun Forbes Columnist Again Shows Ignorance About Chapter 7 Bankruptcy
Earlier this month, I posted a rebuttal to a Forbes online article written by a tax lawyer named Stephen Dunn. Mr. Dunn opines that usually Chapter 7 is not the best option for debtors facing severe financial hardship.
Noted consumer advocate Gerri Detweiler saw my Bankruptcy Law Network post and invited me to guest post a rebuttal for publication on Forbes online. My colleagues in the Bankruptcy Law Network contributed to this guest post and together we demonstrated the flaws in Mr. Dunnâ€™s arguments – point by point.
Now, to quote Ronald Reagan – â€œthere you go again!â€
In his June 17 opinion piece, Mr. Dunn restates his conclusion that â€œbankruptcies often do more harm than good.â€ Once, again, however, Dunn puts for absolutely no evidence whatsoever to support his contentions. In his first opinion piece, Dunn relied on anecdotal evidence – one case where involving tax debt where he was the debtorâ€™s counsel and a second case involving his son, an attorney for a bank suing a failed business owner on a guarantee.
This time, Dunn doesnâ€™t even bother to cite a real case – he simply makes up an example to support his conclusion. More troubling, his understanding about how a consumer bankruptcy works in the real world is simply wrong. He seems to be reading talking points provided to him by credit card and banking industry lobbyists.
I certainly hope that Mr. Dunn does a better job conjuring arguments when he is representing real clients. Where is the evidence? Are there any statistics or studies showing that a bankruptcy filing has a deleterious or a neutral effect on a bankruptcy filers future financial prospects? Should we draw conclusions about the need for Chapter 7 based on Mr. Dunnâ€™s imagination?
Obviously, everyone is entitled to his opinion. I could take the position that antibiotics do more harm than good in every case, or that there is a vast government conspiracy to suppress information about alien invaders in Roswell, New Mexico. However, putting flawed opinions in print simply does not make them true.
In my experience – and this involves 23+ years actually representing real people in Chapter 7 and Chapter 13 filings in Atlanta – I can only think of a handful of cases where the decision to file was even a close call, and even fewer where a client came back for a second Chapter 7 years later. To the contrary, when I hear from old clients it is usually when they tell me that recovering from bankruptcy was far easier and less painful than they had expected.
I also find it strange that Mr. Dunn does not talk about Chapter 13 bankruptcy at all. It makes no sense at all to talk about “consumer bankruptcy” without mentioning Chapter 13 since reorganizations make up a significant percentage of total consumer filings.
If there is any academic or investigative proof that â€œusuallyâ€ Chapter 7 is not a debtorâ€™s best option, letâ€™s see it. If such proof exists, I would be first in line to encourage Congress to consider changes in the law to better effectuate the stated goal of bankruptcy – to allow the honest but unfortunate debtor an opportunity for a fresh start.
In the meantime, I hope that the thoughtful and intelligent readers of Forbes online see the embarassingly weak reasoning used by this columnist who has decided to write about a topic far beyond even the penumbra of his area of expertise.
Jonathan Ginsberg, Esq.
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