Myth and Shame Keep Many from Bankruptcy

We ran across an interesting take from the University of Arkansas this morning on the subject of bankruptcy myths and the shame that is typically associated with bankruptcy protection. A couple of facts from the article that we’d like to highlight:

1. The overwhelming majority of U.S. bankruptcy files are by individuals, not corporations or entities.
2. Most individuals wait too long to seek bankruptcy protection.

So why do we wait?

“It’s very sad,” says Tim Tarvin, associate professor and supervising attorney at the Federal Practice Clinic at the University of Arkansas School of Law. “It’s not unusual for people to break down in the interview setting with the student attorneys who are representing them. These families have been working so hard trying to figure out how to pay off their debt, and it’s just not working. The cash just doesn’t flow. The money isn’t there, and in most cases, it hasn’t been there for a long time.”

Tarvin cites statistics in the book The Two Income Trap, by Elizabeth Warren, a Harvard law professor. According to Warren’s survey, half of bankrupt families were unwilling to admit even anonymously that they had filed Chapter 7 or Chapter 13.

“Very often and for whatever reason, there is tremendous shame,” Tarvin says. “For many of our clients, it’s against the tenets of their religion, despite Deuteronomy.”

There’s no shame in filing bankruptcy. In fact, the idea the washing away ones debts every 7 years comes from the Bible. If you live in Kansas or Missouri, pick up the phone and call Neil today to talk about it. For a free consultation, call (816) 561 1818 to learn more about the options available to you.