Life After Bankruptcy

Houston County Attorneys giving you your life back after Bankruptcy in Dothan, Taylor, Columbia, Daleville, and throughout Alabama

There are several common misconceptions surrounding life after bankruptcy.  Many people believe they can never re-establish their credit, or will never own a home, car, or credit card again. This makes them reluctant to file for bankruptcy and avail themselves of the protections to which they are entitled under the law. Fortunately, many of these fears are unfounded, and shouldn’t prevent someone from considering bankruptcy as an option when strapped with debt.  Getting out from under piles of debt and high monthly payments can give a struggling debtor the freedom and flexibility needed to begin building wealth, credit ratings, and retirement savings.

So the question remains, after you’ve been through the bankruptcy process, avoided signing a reaffirmation agreement, and received your discharge – what next? A common theme of the bankruptcy system is the trade-off between protection for debtors and fairness to creditors. The answer to what happens after bankruptcy depends on the type of bankruptcy. After a Chapter 13 proceeding, the debtor is bound by an ultra-specific repayment plan, subject to monitoring by the trustee. By abiding by the terms of the repayment plan, the debtor’s property is not liquidated for distribution to creditors – the debtor keeps his or her property. After a Chapter 7 proceeding, all pre-existing debts are discharged – the slate is wiped clean for the debtor; the “fresh start” begins. The discharge injunction prevents creditors from asserting those old claims or attempting to collect them; they no longer legally exist.

Of course, the fact of bankruptcy is not “wiped away,” and carries with it its own legal and practical implications. For one thing, the bankruptcy will show up on the debtor’s credit rating for the ten years following the discharge. This can make credit harder to obtain, and will also make the credit more expensive for the debtor through higher interest rates.  However, the fact of bankruptcy does not mean a debtor will be entirely denied meaningful access to credit.  Lenders are in the business of lending, and if you have stable employment and ability to repay loans, you are likely to find a lender willing to extend credit. .  Also, considering the fact that all the other debts are gone, and that the law says a debtor may not receive another discharge for the next 8 years, the lender actually has some assurance that a person who has recently emerged from bankruptcy will be able to pay and cannot file again.

Dothan bankruptcy attorneys Parkman White, LLP can help you formulate a post-bankruptcy plan for financial success, and provide credit counseling to help you reclaim your life after bankruptcy. We have no “former clients” at Parkman & White – only clients who do not currently have cases pending. Email us or call our bankruptcy attorneys today at 334-792-1900 for a consultation, and let us put our experience to work for you.