What Happens When I Declare Bankruptcy in Alabama?

Odenville, AL–When you declare bankruptcy in Alabama, a number of things can happen depending on the type of bankruptcy you file for. Perhaps the most beneficial is the automatic stay that is issued that prohibits creditors from pursuing you for owed debt. This automatic stay is issued in the form of a court order.

Once an automatic stay is issued, your creditors, including debt collection agencies, will need to cease all efforts in attempting to collect the unpaid debt. Phone calls must stop and letters in the mail must no longer show up. If a civil lawsuit has been filed against you or your business, it will change to pending status until a decision is made on your bankruptcy case.

If you’re being pursued by multiple creditors you cannot pay or have civil lawsuits in motion, an Odenville, AL bankruptcy lawyer at Hill, Gossett, Kemp & Hufford, P.C.can help you decide if filing for bankruptcy is a good option for you.


Declaring bankruptcy can help remove financial liability


Sometimes, bankruptcy allows for some or all of your debt to be erased. This means you are no longer required to pay it back. If you’ve acquired a substantial amount in credit card debt or  medical debt, filing for Chapter 7 bankruptcy could provide you with a clean slate to work with. In most cases, the court will wipe away these types of debt when you file for Chapter 7 bankruptcy.

Chapter 11 bankruptcy, on the other hand, could allow for some of your debt to be discharged, though this type of bankruptcy is usually used by those looking to set up a repayment plan with their creditors. 

To learn more about the types of bankruptcies you can file for, contact Hill, Gossett, Kemp & Hufford, P.C. at one of their office locations listed down below.

What are the disadvantages to filing for bankruptcy in Alabama?


Although bankruptcy can help you get a handle on debt you can’t afford to pay back, there are long-term effects of filing. For instance, bankruptcy will remain on your credit report for approximately seven to 10 years. It’s also important to point out that filing for bankruptcy doesn’t always result in all of your debt being discharged (i.e. thrown out).

There are certain types of debt the court will not discharge, some of which include:

  • Court-ordered alimony and child support
  • Some student loan debt, although there are lawmakers pushing to cancel it.
  • A federal tax lien for taxes that are owed to the government.
  • Court fines/penalties.
  • Fines or penalties owed to the government.


Essentially, what this means is that you could file for bankruptcy and still owe creditors once your request is processed.

Now, if you have questions related to the bankruptcy process or would like to have your situation assessed by an experienced Odenville, AL bankruptcy attorney, the lawyers at Hill, Gossett, Kemp & Hufford, P.C. are ready to help.


Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.


Hill, Gossett, Kemp & Hufford, P.C. can be reached at:


Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com


Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500


Springville Office 

6441 U.S. Highway 11

Springville, Alabama 35146

Phone: (205) 467-2225

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