Facts You Must Know About Alabama Bankruptcy
You should carefully look over the laws that Alabama has. Some are different than the ones from your state. Of course, some are the same.
Chapter 7 and 13 are the two types of bankruptcy commonly filed by individuals and couples in Alabama. There are differences between the two.
A Birmingham bankruptcy lawyer, or one from another city, takes possession of any nonexempt assets, sells them, and then uses the proceeds to pay creditors. This is how a Chapter 7 bankruptcy proceeding works. A few months after the petition is filed is when the discharge generally is entered.
An individual filing bankruptcy proposes a plan to repay debts over a three to five year period. This is how a Chapter 13 bankruptcy proceeding is different. The plan must be approved by the court, and payment arrangements are not paid to the Tuscaloosa bankruptcy attorney but rather to the bankruptcy administrator, who then disburses the payments to creditors based on the terms of the approved plan. The discharge is not granted until the conclusion of the repayment plan.
Most people choose Chapter 7 bankruptcy. It requires no repayment. Also, the process ends much quicker. Recently, there were laws passed to limit who could and who could not file for Chapter 7 bankruptcy.
There are two ways to pass the test to determine if you can file for Chapter 7 or not. Either way you choose you would increase your chances of being able to file by getting an Alabama bankruptcy lawyer.
The first way is to compare the household income of the person filing to the state median income. You must have a gross income that is less than the state average. Gross income is not how much you take home but rather it is how much you make prior to taxes. The annual income is calculated using the average gross income for the six-month period prior to filing. The average income in Alabama is about $55,000.
Don’t feel doomed if your income exceeds $55,000. If your income exceeds the average income, you can still file Chapter 7 based on how well you perform on a means test calculation. You would use Bankruptcy Form 22A to calculate it.
The Bankruptcy attorney Birmingham administrator in a Chapter 7 proceeding will take possession of nonexempt assets and liquidate them in order to pay creditors.
There is not much that is exempt in Alabama.
Many people who file bankruptcy without counsel do so because of the belief that they cannot afford a Birmingham bankruptcy attorney. Bankruptcy is a tough legal matter and it is better for you to have an attorney. There are people out there who can give you help for free but you just have to look for them.
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