Bankruptcy Myths and Misunderstandings

man in business bankruptcyOne of the reasons that prevent people in financial trouble from consulting with a bankruptcy attorney Mobile AL is misinformation. Most people do not believe that filing for bankruptcy can provide an opportunity to rebuild credit. This is particularly unfortunate for anyone with a low credit score already, and they are running the risk of foreclosure or wage garnishment. Discussed below are some of the common bankruptcy myths and misconceptions surrounding Alabama bankruptcy that will help you make informed decisions.

Only Irresponsible People File for Bankruptcy

Most people believe that the only individuals who should file for bankruptcy are people who have been irresponsible with their finances. However, many other issues like divorce, health issues, unemployment/ underemployment, and mismanagement can also cause financial distress. No matter how well you save or are responsible, situations outside your control can lead to financial troubles. Do not hesitate to reach out to a Mobile AL bankruptcy attorney due to these bankruptcy myths, or believing you cannot be helped.

You Could Lose Your Job

Another myth people believe is that your employer will be notified of your status, and you could lose your job. This is not true. Unless your employer is a creditor, they do not automatically get notified when you file for bankruptcy. However, if you file for chapter 13 bankruptcy, payment will be deducted from your wages. Still, you should know that the bankruptcy code does not allow an employer from firing someone just because of bankruptcy.

Your Case Will Be in The Newspaper

Everyone wants to keep their financial troubles within their close circle of friends. And because of this, they hesitate to file for bankruptcy, under the assumption that their case will be in newspapers for everyone to see. But like your bankruptcy attorney Selma will advise you, contrary to other legal proceedings like probate, bankruptcy filings are not always published in the newspaper. In fact, the only people who are informed are your creditors and co-debtors.

Filing Bankruptcy Prevents One from Obtaining Credit in Future

What most people seem to forget is that by the time you are thinking of filing for bankruptcy, you are already a credit risk with limited borrowing options. Lawsuits, delinquencies, garnishment, defaults, foreclosures, and repossession can harm your credit score more than filing for bankruptcy. As much as filing for bankruptcy will appear on your credit report, that does not mean you will be prevented from borrowing money in the future.

You Will Lose Your Possession

Another myth surrounding filing for bankruptcy is that you automatically lose your car and house. However, if you work with a bankruptcy attorney Mobile Alabama, they will inform you that you can exempt certain assets such as retirement accounts and cars. Furthermore, if you are able to maintain your payments, debtors will not seek to repossess any collateral.

Filing For Bankruptcy is Hard

This is very common among bankruptcy myths. As much as there have been some amendments regarding bankruptcy law, these changes do not create any significant barrier for anyone in financial trouble. An experienced attorney can help explain such matters to you. They will walk you through the whole process and ensure you understand how the law works.

How An Attorney Can Help

Everyone’s financial troubles are different. That is why you need to meet with a bankruptcy attorney Robertsdale, to advise you according to your individual case. Dealing with bankruptcy Mobile Al on your own is not easy. Besides advice, your attorney will help you with the paperwork and represent you in court proceedings.

At Loris Bankruptcy Law Firm, we are ready to help potential clients in matters of bankruptcy. We help you debunk these myths and ensure that you have the correct information to make informed choices. Give us a call today for legal assistance.