Consumer Bankruptcy Lawyers in Center Point, Alabama

Center Point Consumer Bankruptcy Lawyers, AL

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Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is normally considered as an option of last resort, because while it can stave off financial disaster, it has some considerable long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in Alabama will be very similar to the procedure anywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local attorney in Center Point, Alabama before filing.

Chapter 7 Bankruptcy in Center Point, Alabama

In Center Point, Alabama, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is absolved. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.

Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Center Point, Alabama. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.

Chapter 13 Bankruptcy in Center Point, Alabama

Chapter 13 Bankruptcy in Center Point, Alabama is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each particular case. Chapter 13 bankruptcy does not excuse debt, it restructures it. This involves a court coming up with a altered repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original contracts that created the debt in the first place. This creates a new payment structure, normally involving a single monthly payment, that the debtor should find manageable.

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Which Type of Consumer Bankruptcy Should I File in Center Point, Alabama

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your particular situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.

Regardless of your situation, you should speak with an attorney in Center Point, Alabama who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.

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