4 False Assumptions About Bankruptcy
For many people, the word bankruptcy carries an ominous ring to it. There are a lot of preconceived notions and false assumptions about bankruptcy, which is why people don’t want to be usually associated with it. Because of this, however, they overlook how useful it can be in certain situations.
With the right help and guidance from an Alabama bankruptcy lawyer, however, you might be surprised at how much relief filing for bankruptcy in Alabama could bring if you do it right.
4 False Assumptions About Bankruptcy
There are many false assumptions about bankruptcy, all of them pointing to a disastrous scenario. While the situation may not be ideal, it’s still important to distinguish facts from myths.
False Assumption #1: Bankruptcy protection is only for financially irresponsible people.
Filing for bankruptcy protection doesn’t necessarily mean you’re fiscally irresponsible, blowing off the money you don’t have on things you don’t need.
Sudden loss of income can quickly spiral into debt and loan default. From there, an entire series of unfortunate events can unravel, bringing the person to the dreaded financial ruin. Medical emergencies, for example, can instantly wipe out entire life savings.
The bottom line is that even the most fiscally responsible person can fall in hard times and require bankruptcy protection.
False Assumption #2: Bankruptcy leaves you with nothing.
One of the main reasons why people are so averse to the idea of filing for bankruptcy protection is because they think it will take everything away from them.
Unlike the more dramatic depictions people see in movies; wherein entire houses are stripped of possessions, bankruptcy gives them a chance for a fresh start. Personal assets and personal property can be protected by bankruptcy laws.
Working with an Alabama bankruptcy lawyer can help you navigate the entire process to ensure your assets are protected.
False Assumption #3: Filing for bankruptcy will destroy your credit.
While it’s true that bankruptcy filing will impact your scores almost immediately and can stay on your record for 7 to 10 years, the other half of the story is that these low scores will actually improve and increase later on.
That’s because all the negative ratings you’ve had because of the debts weighing you down are now finally released. It makes you look like a viable lender once more, which puts you in a better position to recover.
False Assumption #4: Bankruptcy can cost you your job.
It’s simply not true. The bankruptcy law explicitly prohibits discrimination of an employee or applicant based on their bankruptcy record. There should be no fear of reprisal or consequence on your job because you filed for bankruptcy relief.
There are two different types of bankruptcy filings: Chapter 7 and Chapter 13.
Chapter 7 requires selling off your assets in order to pay your creditors. Chapter 13 allows you to keep your assets but requires you to repay all your debts over a set time.
Your options will ultimately depend on your situation. That’s why it’s very important that you seek legal help from a bankruptcy lawyer before making your move to file for bankruptcy. Especially it will have long-term consequences on you financially and legally.
How a Bankruptcy Lawyer Can Help
Bankruptcy planning involves applying the means test, which is essentially meant to determine if there’s a way for you to pay your debts with your existing assets. A bankruptcy lawyer in Mobile, AL, can help determine what kind of bankruptcy suits your situation best.
In filing for bankruptcy, they will value all your assets and assess if you qualify for any exemptions. These exemptions can help protect as much of your assets as possible.
Your bankruptcy attorney can also help create a strategy that would determine which among your debts should be eliminated first and foremost, so you can begin to put yourself in a more favorable position.
The Loris Bankruptcy Law Firm can help you make your first step to financial recovery with the right strategy. Call us today to set an appointment with our bankruptcy lawyer to get started.