The Bankruptcy Lawyers Blog

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The internet provides a lot of quick, convenient access, but it has its dangers, too. One of those dangers is that anyone who has access to a computer and can write a reasonable English sentence can hold himself out as an expert and someone, somewhere, is going to be fooled. Maybe a lot of someones. And then the "information" spreads.

That appears to be exactly what happened last week, when The Motley Fool contributor Selena Maranjian decided to pick up a message board post from 2003 explaining why you shouldn't file for bankruptcy and turn it into a column that ended up appearing on MSNBC.com.

So three years ago, a guy calling himself CPAScott wrote a discussion group post about why he didn't think people should file for bankruptcy, and the post was rife with misinformation. And now, three years and one major law change later, his advice appears on MSNBC, giving consumers helpful "information" like:

Bankruptcy will ruin your credit for a minimum of ten years. That's right, Scott isn't even content to suggest (erroneously) that bankruptcy will "ruin" your credit for the ten years it may remain on your credit report. Instead, he suggests that "it may take much longer to repair your FICO score". He completely ignores the fact that people can and should be rebuilding FICO scores during those ten years, and that most who keep their current bills current see significant improvements in the first 12-24 months post-bankruptcy.

You will lose some of your possessions. That's will, not may. Scott completely ignores the fact that most Chapter 7 filers don't own any non-exempt property and so don't lose any possessions, and doesn't even touch on Chapter 13 repayment plans.

You will lose your credit cards. Scott emphasizes that loss of credit cards is a problem because in the event of some unforeseen problem like the need for a car repair, "you might find it difficult--or impossible--to be able to produce the cash necessary to deal with it...spare cash will be sparse." So in addition to ignoring the possibility of obtaining a credit card almost immediately after bankruptcy, our poster seems to advocate relying on credit cards to cover emergency expenses rather than budgeting and saving for them. It's difficult to understand how Scott's header here--that you'll lose your credit cards--leads to his concluding suggestion that spare cash will be sparse.

The list then shifts to scare tactics and guilt: What if after you file bankruptcy, you get in a car accident and the other driver gets a multi-million dollar judgment against you? Bankruptcy proceedings are public record--you might end up in the newspaper! And you wouldn't want that, because bankruptcy is an "admission of defeat" and "saying you can't manage your own life--that your promise...is no good."

Whether Scott is simply misinformed and well-intentioned or an emissary of the credit industry, it's troubling that an anonymous message board post, three years old and full of easily discredited ideas should find it's way to an outlet like MSNBC, where it will likely be read by many consumers as authoritative simply because of the source. The final source, that is...not the guy who once did some ranting on a message board about a subject he clearly knows little about.