It’s tough to figure out what to believe when your finances are stressing you to overload.  Debt collectors often stretch the truth or outright lie to intimidate you.  Debt collector lies about bankruptcy can usually be broken into two broad types – TYPE A and TYPE B.

DEBT COLLECTION MISTRUTH -TYPE A: “We’ve researched your financial situation, and you won’t qualify to file bankruptcy.”

This makes you (the debtor) feel like you don’t have any other options.  Maybe you remember the media coverage of the 2005 bankruptcy reforms – which makes this statement seem like it should be true. You may have a broad understnding of the new bankruptcy laws  – and you make “think that the debt collector is right on target”.  The truth is, it only sounds like the truth. Debt collectors do not legally have enough information to know whether you “qualify for bankruptcy”.

The Chapter 7 means test is a calculation involving income, the median income in Michigan, and expenses based on a combination of IRS, local, and actual numbers. Reports from U.S. Trustee certified Credit Counseling agencies show that more than 96% of the people who come to them considering bankruptcy qualify for Chapter 7 bankruptcy, and even those few who don’t can likely file under Chapter 13.

DEBT COLLECTION MISTRUTH -TYPE B: “You can’t file bankruptcy on that type of debt anymore.”

This outright mistruth serves two purposes: To convince you (the debtor) that you are stuck with your debt, and that you must make “this particular debt” a priority. Another words, they are trying to make you think that the “debt in question” is different than your other debts and you better pay it special attention.  Most debt collection calls relate to credit card and other unsecured debt, nearly all of which is dischargeable in bankruptcy

• Credit card debt is still dischargeable in bankruptcy.
• Medical bills are still dischargeable in bankruptcy.
• Deficiency judgments relating to repossessions or mortgage foreclosures are still dischargeable in bankruptcy.

Debt collectors are not a good source of information about bankruptcy law and options.

The best source of information about bankruptcy is a local bankruptcy attorney like Chimko &Associates. Consumers can also take advantage of the extensive general information about Chapter 7 bankruptcy, Chapter 13 bankruptcy, debt collection practices, dischargeable debts, and more at Chimko & Associates.