Many people feel uncomfortable with the negative stigma of filing for bankruptcy. However, if you are like thousands of other Americans struggling with finances and debt, bankruptcy could significantly help you overcome your burdens and lead you to a path of financial freedom.
Below, you will find answers to some of the most common bankruptcy myths. If you are still seeking answers about a specific question, do not hesitate to call Steve Altmann at The Nomberg Law Firm, (205) 930-6900.
7 COMMON BANKRUPTCY MYTHS
- Filing for bankruptcy will ruin my credit.
Not true! While bankruptcy does stay on your credit report for anywhere from 7 to 10 years depending on the type of case you file, bankruptcy can actually help you rebuild your credit. Bankruptcy gives you a clean slate, and you can start to open new credit cards and rebuild your finances, often as soon as your case is finished.
- Everyone will know I filed for bankruptcy.
While filing personal bankruptcy creates a public record, those records are not published in the newspapers or a forum that is easy for everyone to see. Only parties relevant to your bankruptcy case need to know about your filing.
- My spouse is filing, so I also have to file.
No, you do not. If you are responsible for the same debt, you may choose to file together to save on the cost of filing. But, you have the right to choose to file separately from your spouse or to not file at all. An attorney can help you go over your options.
- I cannot bankrupt on Income Taxes.
Yes, you can! As long as you have timely filed your tax returns and the income taxes are more than 3 years old before you file for bankruptcy, the income tax that you owe can be discharged in your bankruptcy case. To determine if bankruptcy will help with your tax problem, contact my firm as soon as possible.
- I will lose all my assets and property in bankruptcy.
Not if you file the appropriate type of bankruptcy for your situation. Most of your household furnishings and other personal property can be exempted up to a certain amount– including equity in your home and your primary source of transportation. To determine whether Chapter 7 or Chapter 13 is right for you, contact my office for a consultation to discuss your case.
- Bankruptcy is shameful.
Absolutely not! Bankruptcy can happen to anyone. So many situations that cause a person to consider bankruptcy are completely out of your hands. Thousands of Americans file each year. Bankruptcy is a way to help you rebuild your credit and get a fresh start in life.
- I have too much money in my 401(k), so I am not eligible for bankruptcy.
Not true! Retirement funds in your 401(k) and in most IRAs are exempt assets that are protected from your creditors and the bankruptcy trustee. Those funds are for you to use in the future when you retire and should not prohibit you from filing for bankruptcy now. Be sure to call a bankruptcy lawyer to discuss your options.
If you are struggling to pay your debts and concerned about the future welfare for you and your family, it is important that you seek the advice of a bankruptcy lawyer to ensure that your assets are protected and the debts you seek to eliminate are dischargeable. Our attorneys have been assisting consumers and business owners with bankruptcy matters for over 25 years. If you are considering filing for bankruptcy, please consider contacting the Nomberg Law Firm. Our office number is 205-882-5005.
Steven D. Altmann has been a lawyer for more than 25 years. Steve has earned an AV rating from Martindale-Hubbell’s peer-review rating and was recently named a Super Lawyer and Top Attorney by Birmingham Magazine in the area of Bankruptcy Law.
We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.