Experienced Tennessee Attorney Debunks Common Bankruptcy Myths

Reliable Knoxville debt relief lawyer responds to common misconceptions

For many people, bankruptcy is a scary word. Though bankruptcy involves hard choices and commitment, with the right guidance, you can relieve your debt burden in a positive, orderly manner. From the office of William E. Maddox, Jr. LLC, Attorney at Law in Knoxville, I utilize more than 25 years’ experience practicing law in Tennessee to dispel common myths and help my clients establish realistic expectations for Chapter 7 and Chapter 13 bankruptcy. I also represent East Tennessee residents during debt settlement negotiations and foreclosure defense.

Knowledgeable Knox County lawyer separates bankruptcy facts from fiction

Some of the most frequently repeated misconceptions about bankruptcy relate to:

• Marital status — It is not true that married spouses always need to file for bankruptcy together. If one spouse is individually liable for a debt, such as substantial student loan obligations incurred prior to the marriage, there is no need for the other spouse to file. If spouses are equally liable for a debt, it is advisable for both to file together. This way, the automatic stay protects both spouses rather than leaving the non-filer vulnerable to debt collectors.
• Debt forgiveness — Many people are under the incorrect assumption that declaring bankruptcy can relieve them of all debt. The purpose of bankruptcy is to repay as much debt as possible given the petitioner’s financial ability. However the law makes it difficult or impossible to eliminate certain types of debt. After reviewing your circumstances, I can explain how your case might proceed.
• Credit impact — While it is true that declaring bankruptcy can negatively impact your credit score for years, it is also true that declaring bankruptcy can help you to start rebuilding your credit by making scheduled payments on time. Though it might be more difficult to gain approval for a loan or credit card after you’ve filed bankruptcy, it is not impossible. After you complete the bankruptcy process, more opportunities gradually become available.
• Foreclosure — Declaring bankruptcy does not prevent home foreclosure indefinitely. If you declare Chapter 13 bankruptcy and want to keep your house, you will need to meet your mortgage obligations, perhaps on a revised schedule you agree to with your lender. Failure to make payments can result in a court lifting the automatic stay and allowing foreclosure to proceed.

Despite what you may believe, bankruptcy does not equate to failure. Many people are able to gain fresh starts and establish better relationships with money by going through bankruptcy. I have a long track record of helping Tennesseans re-establish a strong financial foundation.

Legal adviser offers clarity about bankruptcy filing limitations

Other bankruptcy myths relate to the process and limitations of filing. It is not true that there is a limit to the number of times a person can file for bankruptcy. However, it is true that you can be prevented from receiving a debt discharge if you file for a second or subsequent bankruptcy too soon after receiving a prior discharge.

It is also not true that filing for bankruptcy is terribly difficult or expensive. Your petition must include basic financial information as well as evidence that you completed a mandatory credit counseling course. Having a qualified lawyer by your side can help you prevent common mistakes that could result in delays or a denial.

I can walk you through the entire process and will work diligently to make filing for bankruptcy in Tennessee a manageable and low-stress experience.

Contact a dedicated Knox County bankruptcy attorney for answers to your debt questions

At the Knoxville office of William E. Maddox, Jr. LLC, Attorney at Law in Tennessee, I answer clients’ debt relief questions and represent them in bankruptcy proceedings. To schedule your free consultation, call 865-293-4953 or contact me online.