Top 15 Lies About Bankruptcy. Lie #9: Only Deadbeats File for Bankruptcy

16 Aug Top 15 Lies About Bankruptcy. Lie #9: Only Deadbeats File for Bankruptcy

Lie #9: Only Deadbeats File for Bankruptcy
(Variants: I’m a Bad Person if I File for Bankruptcy; Bankruptcy is Immoral, Bankruptcy is Against the Bible.)


This is the big one. And it is about as far from the truth as can be.

The vast, overwhelming majority of the people who file bankruptcy are good, honest, hard-working people, just like you and me, who file as a last resort. They have spent months or years struggling to pay the bills left over from some life-changing experience, such as a serious illness, the loss of a job, separation or divorce, a failed business venture, or some family emergency…or because they honestly and mistakenly fell into debt at a young age before they knew better…before they knew anything about budgeting or how to manage money.

Astudy by Professor Elizabeth Warren of Harvard Law School found that over half of all bankruptcies are related to illness, and 75% of those people who end up filing because of medical bills have health insurance. Nearly 9 out of every 10 bankruptcies are caused by events out of people’s control–illness or death of a family member, job loss of job change, separation or divorce. And the most important fact about these events is that none have anything to do with fiscal irresponsibility, lack of intelligence, lack of hard work, or anything other than something bad happening to somebody good.

In my experience, almost all of my clients want to repay their debts…they just can’t. And the credit card companies, collection agencies, mortgage companies and other bill collectors aren’t willing to work with them so that they can.

For a more detailed discussion of this question, see two of my blogs on this topic, “Am I a Bad Person if I File for Bankruptcy” and “Bankruptcy and the Bible.”

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Brett Weiss, a senior partner at The Weiss Law Group, 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 colleague, Daniel Press, 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 previous 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 and the Bankruptcy Bar Association of Maryland. He has 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.
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