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Dothan financial planners can help people in AL decide if filing for bankruptcy is the right move for them. For some, it is the but declaring bankruptcy is a serious decision with long term ramifications on your credit. Your Dothan financial planner can help you to decide if bankruptcy is the right choice for you.

AL Bankruptcy Information

Bankruptcy, while not for everyone in debt in Alabama, affords those who file with a fresh start from their debts with the help of an Alabama financial planner. It is beneficial to the economy as a whole as it keeps credit moving. To those who do declare, it can be a new chance at a financial clean slate. While a bankruptcy remains on your credit report for six years after the fact, it allows people to catch up on or have their debts forgiven. Before declaring bankruptcy, its important to speak to a Dothan financial planner.

Bankruptcy is a legal procedure. To declare bankruptcy, you must fill out a variety of paper work and bring your case before a judge. Bankruptcy court is part of the federal court system so there are bankruptcy courts located throughout AL and in Dothan itself.

When you declare bankruptcy in Dothan or elsewhere in Alabama, your ultimate goal is to have your debts discharged. This protects you from creditors. If you debts are discharged, your creditors are permanently barred from coming after you to collect your debts.

While many debts can be discharged, there are some that can not. Tax debts, spousal or child support, fines or penalties associated with breaking the law, student loans and any debts not disclosed as part of filing will not be discharged. If you declare bankruptcy in Alabama and have any of these debts that you are still responsible for, Dothan financial planners can assist you with coming up with a plan for paying these off.

There are a number of degrees of bankruptcy, called chapters, with various outcomes. If you are thinking about declaring bankruptcy, Dothan financial planners can help you decide with chapter is appropriate for your situation. Not every chapter will be appropriate for each person and their situation. While the chapters can be confusing, a Dothan financial planner can break it down for you.

Chapter seven bankruptcy is the most common chapter filed by those seeking bankruptcy protection. Under chapter seven bankruptcy protection, debts are liquidated and you would not be responsible for paying them. For many, this may be the best solution but a Dothan financial planner, or a financial planners association can advise if this is right for you.

Chapter 13 consolidates an individual's debt but doesn't eliminate it. You would still be responsible for paying it off. You would need to formulate a debt payment plan, something that financial planners in Dothan can help with. You would then have a period of three to five years to pay your debts off.

Chapter 11 bankruptcy can be declared by individuals and businesses. Chapter 11 doesn't eliminate your debt entirely but merely reorganizes it. While you are repaying your debts, the court will place limits on what you can spend your money on. The courts may look favorably on employing a Dothan financial planner to keep you on the right place to not repeating your mistakes.

Avoiding Bankruptcy in Dothan

Avoiding bankruptcy in Dothan boils down to developing good financial habits and manage money wisely. As easy as it is to use credit cards for everything, don't. Avoid racking up credit card debt as much as possible. Planners will encourage you to pay cash as much as possible.

To avoid bankruptcy or rebuild after, its important to budget and to stick with it. Financial planners would tell you to know how much you make and then never spend more than that. Getting in over your head financially will lead to major problems down the road.

If you are having trouble paying your debts, call your creditors sooner rather than later. They may show some leniency if you don't wait too long or if you call them in advance. If you know money will be tight due to divorce, illness or job loss, call your creditors immediately. They may reduce your payments temporarily, waive late fees or penalties, lower your interest rate or let you skip payments now to make larger payments later.

If all else has failed, speak to planners at a reputable credit counselor. Planners can develop a strategy to keep you out of bankruptcy. Check the credentials of a credit counselor first to avoid falling victim to a scam.

Dothan financial planners can help you to avoid declaring bankruptcy. Financial planners in Dothan can also help you to learn from your financial mistakes and rebuild your life after a bankruptcy. If you do have a bankruptcy, take advantage of the fresh start it affords you and practice smart money management from now on.

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This website provides information related to the subjects covered. Before making any financial or legal decisions, a professional should be consulted.