Top 15 Lies About Bankruptcy

by Brett Weiss, Esq.

February 16, 2013

Bankruptcy is an area of the law that people avoid. They don’t want to think that they might need its protections one day, and as a result, lies about what it can and can’t do, and what happens in a typical case, gain a foothold in the popular consciousness. This is particularly so since it is to bill collectors’ advantage to continue to spread these lies in the hopes people actually believe them.

Unfortunately, being lies, they’re wrong, and in most cases, really, really wrong.

This article will talk about 15 of the most common lies about bankruptcy. Each lie has a link–clicking on it will take you to a description of the lie, along with our “Truth-o-Meter” rating.

Lie #1: Congress Eliminated Bankruptcy in 2005.

Lie #2: Everyone Will Know You Filed for Bankruptcy.

Lie #3: If You File for Bankruptcy, You Will Lose Everything You Have.

Lie #4: You Will Never Be Able to Own Anything Ever Again.

Lie #5: You Will Never Be Able to Get Credit Ever Again.

Lie #6: Filing Bankruptcy Will Destroy Your Credit for 10 Years.

Lie #7: If You’re Married, Both You and Your Spouse Have to File for Bankruptcy.

Lie #8: It’s Really Hard (and Expensive) to File for Bankruptcy.

Lie #9: Only Deadbeats File for Bankruptcy (aka Filing Bankruptcy Means You’re a Bad Person).

Lie #10: Only Big Businesses Can File for Chapter 11, Not People.

Lie #11: Bankruptcy Won’t Stop Creditors from Harassing You and Your Family.

Lie #12: Bankruptcy Can Lead to Divorce.

Lie #13: You Can’t Get Rid of Back Taxes in Bankruptcy.

Lie #14: You Can Only File Once for Bankruptcy Protection.

Lie #15: There is a Minimum Amount of Debt Required to File for Bankruptcy.

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.

Last modified: February 7, 2013