Bankruptcy Myth #1- “You can’t file bankruptcy anymore”- Don’t believe it!

This one is totally untrue and one of the worst fallacies out there.  Bankruptcy is still safe, legal, ethical, and available to you if you need it.  This misconception arose after the 2005 BAPCA bankruptcy law changes occurred.  After that law came into effect people believed that bankruptcy was either completely eliminated or now so hard to do that it was in effect no longer available.

I still remember the long line snaking around the Bankruptcy courthouse in San Diego in October of 2005.  Everyone was trying to file before midnight when the new law was coming into effect.  There were hundreds of people there on the last day.  There was real fear in the air.  The credit card companies had won.

Though the credit card companies did their best to lobby the Congress to write the law to benefit them, they could not limit it as much as they wished.  85% of people who could have filed a chapter 7 bankruptcy under the old law can still file under this new one.  The means test that was added is designed only to push you into a chapter 13, not to push you out of bankruptcy.

If you look at a chart of bankruptcy filings in the last 5 years you see that there was a huge spike in the number of filings prior to the change in the law in October of 2005.  In 2006 there was a huge drop off I the number of filings.  There has been a rise in filings each year since then but they have not yet risen to the number that they reached in 2004.  They have certainly not risen to where they would have been had they increased each year without the new law.

The law therefore accomplished what it set out to accomplish.  It scared everyone out of bankruptcy.  People actually thought that bankruptcy was no longer available to them.  This is not true.  This fear they instilled in people means that a lot of people who can and should file are not filing.  They are continuing to be debt slaves to these giant banks just like the banks want them to.

Don’t fall into this trap.  Bankruptcy is still available to you so file if you need to.

For more info. check out my websites at: or

I am a bankruptcy lawyer in San Diego.

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to:

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