Top 5 Myths About Filing for Bankruptcy in Alabama
Debt challenges may strike individuals and families throughout Alabama for various reasons, including sudden medical expenses or loss of employment. Unfortunately, confusion and falsehoods often prevent people from exploring solutions that could bring lasting relief through bankruptcy in Alabama.
At Loris Bankruptcy Law Firm, we believe in sharing clear insights so residents understand their options. If mounting bills and creditor calls are overwhelming, connect with us right away to learn how filing for relief could be the path forward. Call (251) 432-3100 and speak with our skilled bankruptcy lawyers in Mobile, AL for a personalized evaluation.
Myth #1: You Lose Everything
A common belief is that filing for protection means all assets will be taken away. In reality, Alabama has exemption laws allowing filers to keep certain property, such as a primary home or vehicle used for work (Ala. Code § 6-10-2). The purpose of Chapter 7 bankruptcy Alabama or Chapter 13 is to help honest debtors make a fresh start, not to leave them destitute. Many individuals keep most, if not all, of their belongings. For more details on legal protections, visit this page.
Myth #2: Only the Irresponsible Seek Relief
Filing is often viewed negatively. Yet, unexpected life events—such as medical bills or a sudden reduction in income—can push even the most careful person into financial distress. The Federal Reserve reports that nearly 40% of Americans would struggle to cover a $400 emergency expense.
Working with a bankruptcy attorney in Mobile Alabama can offer a legitimate and legal tool to manage your debts responsibly. If you’re exploring options for reorganizing debt or seeking help for chapter 7 bankruptcy, let our AL, Mobile attorneys provide clarity on how these proceedings function in a fair and structured manner.
Myth #3: Your Credit Is Ruined Forever
While it’s true that bankruptcies appear on credit reports for up to ten years, many people begin rebuilding credit soon after discharge. Creditors often recognize that once a case closes, you have reduced debts and may be more capable of repaying new obligations.
In many instances, individuals might qualify for mortgages or car loans within a couple of years. A skilled bankruptcy attorney in Mobile, AL can offer guidance on practical steps to restore your financial standing, such as using secured credit cards or budgeting methods.
Myth #4: Bankruptcy Can’t Address Certain Debts
Some assume that high debts from credit cards, medical bills, or personal loans are untouchable. In reality, federal law makes it possible to reorganize or eliminate most unsecured obligations, as detailed in 11 U.S.C. § 523.
Although obligations like child support or certain tax debts remain non-dischargeable, individuals with credit card balances or large medical bills often find significant relief through either Chapter 7 or Chapter 13. Alabama’s bankruptcy exemptions also protect essentials, helping individuals keep necessary assets. The goal is to provide a fresh start, not to penalize honest filers who face tough financial hurdles.
Myth #5: You Can Only File Once
Some believe that a single court filing is the only chance to seek debt relief, but that is not always true. Although time limits do exist, federal statutes such as 11 U.S.C. § 727 permit additional filings once specific waiting periods pass. The particular chapter you choose—whether Chapter 7 or Chapter 13—determines how soon you can file again.
Many people do qualify for a second or even third opportunity if life events lead them back into serious financial strain. AL, Mobile attorneys understand these rules and can provide the guidance needed to fulfill all legal requirements. Repeat filings remain viable if approached with proper planning.
Take Control of Your Finances
At Loris Bankruptcy Law Firm, we understand how overwhelming the decision to file can be, and we are committed to assisting you in choosing the best legal path. Our skilled bankruptcy attorney in Mobile, AL knows how to safeguard important assets and structure repayment plans that make sense. Secure your financial well-being with help from us—contact us today for a consultation and take the first step toward lasting relief.