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AL Bankruptcy Lawyer Dispels Bankruptcy Myths

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If you’re dealing with unmanageable debts, you have probably thought through all your options for obtaining debt relief. You may have even considered bankruptcy, but you might be unsure if it will actually help you. Our AL bankruptcy lawyer, Eric Wilson, takes the time to dispel common bankruptcy myths that could be holding you back from the debt relief you seek, including:

Will I Lose My Home Or Car If I File for Bankruptcy?

No. Under federal and the state of Alabama laws, many of your belongings can be exempt from bankruptcy. We work diligently to protect what matters most to you, including your house, car, guns, and other personal possessions from bankruptcy debt collectors. Note that bankruptcy filing temporarily halts a banks’ foreclosure on your home under Chapter 11, Chapter 13, and Chapter 7 bankruptcy.

Bankruptcy Filers Are All Financially Irresponsible.

Incorrect. Just because people generally view bankrupt people as financially irresponsible, doesn’t mean that that’s true. In fact, most bankruptcy filings occur due to financial difficulties outside the person’s control. The three most common reasons for bankruptcy are divorce, extreme illness, and loss of employment.

Bankruptcy Will Ruin My Credit Forever.

False. Most likely, your outstanding debts (such as credit card debt, student loan debt, medical bills, etc.) have already significantly damaged your credit scores. Bankruptcy gives you the option to eliminate those debts, so you can start the slow process of rebuilding your credit. Your bankruptcy filing will likely remain on your credit report for 7 to 10 years though, depending on the chapter of bankruptcy you file.  The bankruptcy attorneys at our law firm provide you with a concrete process and steps towards rebuilding your credit and preparing for life after bankruptcy.

Bankruptcy Is Only A Last Resort. I Need To Use All My Other Resources, Such As My Retirement Savings Or Equity In My Home, Before I Can File.

Not true. Bankruptcy law protects your investments so you don’t have to spend your life savings to take care of debt. It doesn’t need to be your last alternative. With proper planning, you can protect your most important possessions and eliminate debt. Bankruptcy protection applies to social security disability, child support monthly payments, personal injury claims, etc. We work to ensure that your property is also protected through estate planning.

I Can’t File Bankruptcy If I Have A Job.

Untrue. Whether or not you have a job doesn’t affect your right to file bankruptcy. Your employment will only determine what type of bankruptcy you qualify for — Chapter 7 or Chapter 13 — depending on your income. You also cannot lose your job or suffer a demotion just because you filed for bankruptcy. If your employer punishes you in any way for your bankruptcy filing, you have grounds for an illegal discrimination case. Generally though, employers don’t need to know that you filed for bankruptcy and they won’t find out unless they happened to search through Tuscaloosa, Alabama court records.

Married Couples Have to File Bankruptcy Together.

No. It is not necessary for couples to file for bankruptcy together. If they do, bankruptcy law assumes that they equally share liability for their debt. But, it’s not unusual for one spouse to be responsible for the majority of the debt, which is why filing for bankruptcy separately is highly suggested. If only one spouse files for bankruptcy but both are liable, creditors may demand payment from the one who did not file. If you’re going through a divorce, bankruptcy may be suspended in order for the court to make a judgment on asset and debt allocations. Juggling divorce and bankruptcy can make things extra complicated and challenging. The best action you could take is to hire an AL bankruptcy lawyer who can walk you through the process and help you when unexpected problems arise.

The Bankruptcy Process Will Discharge Reckless Spending Prior to the Bankruptcy Filing.

It’s true that filing for consumer bankruptcy will discharge all, or most, of your debt in time. But that doesn’t give you the right to have a spending spree before filing for bankruptcy. The bankruptcy court views reckless spending before bankruptcy as fraud. So a bankruptcy filing won’t discharge spending spree debts.

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If I File Bankruptcy, I Can’t Buy Anything For 10 Years.

Even though bankruptcy shows up on your credit rating for up to 7 to 10 years, it won’t affect how you spend your hard-earned money. Once you complete your Chapter 13 bankruptcy payment plan (which usually lasts between three to five years), you have the financial freedom to spend your money how you wish.

In fact, many creditors see bankruptcy as a responsible step to take care of your debt. Therefore, creditors are more willing to lend to debtors who actively restore their credit after bankruptcy. Once you have finished your last debt repayment, you can begin your fresh start by being mindful of debt, interest, and finances as a whole.

Can I File for Bankruptcy More Than Once?

Yes. In fact, you can technically file for bankruptcy as many times as you want throughout your life. Alabama bankruptcy attorneys at Eric Wilson Law can help you understand your rights in filing again, depending on the time you received your last debt discharge.


Struggling to manage your finances and debt with no relief in sight is no way to live. What makes everything worse are the bankruptcy myths that ultimately discourage a struggling business owner, consumer, or family from receiving bankruptcy legal assistance. That’s why Eric Wilson is so passionate about giving all of his clients a clean slate. Contact Eric Wilson Law in Tuscaloosa, AL today at 205-349-1280.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. This web-site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.