The Road Out of Debt: Bankruptcy and Other Solutions to Your Financial Problems

Chapter 14. 21 Bankruptcy Myths

The great enemy of the truth is very often not the lie—deliberate, contrived and dishonest—but the myth—persistent, persuasive and unrealistic.

—John F. Kennedy

With all matters unknown or unfamiliar, people find it much easier to make up stories and myths rather than to understand and learn the truths. People naturally believe that which fits best with their preconceived notions.

Myths about bankruptcy are no different. Myths about bankruptcy arise from extraordinary incidents that most debtors never encounter. Yet, these are the stories that persist and influence what most people think about bankruptcy.

By this point in the book, you now know ways to solve your financial problems without the need for bankruptcy. If you have decided that filing for bankruptcy is your best alternative and will most benefit you in your unique circumstances, do not let myths about bankruptcy hold you back and prevent you from gaining the fresh start that bankruptcy offers. We address twenty-one bankruptcy myths here.

Myth #1: Bankruptcy Is Expensive

For most people on the brink of bankruptcy, avoiding bankruptcy may be much more expensive and more difficult than filing for bankruptcy.

Filing fees for Chapter 7 and Chapter 13 bankruptcies cost less than $300. When you hire a lawyer, the average cost of a Chapter 7 case is approximately $1,500. For a Chapter 13 bankruptcy case, you should expect to spend between $2,500 and $3,500 if you hire a lawyer. While not cheap, the amounts ...