In Chickasaw, Alabama, bankruptcy is a court procedure in which a person or business has some or all of their debts absolved (or "discharged"), theoretically allowing them to commence with a clean slate, and move on with their lives no longer drowning in debt (and hopefully having learned to better manage their use of credit in the process). Of course, one should never view bankruptcy as a "get out of debt free" card, allowing someone to be discharged of their requirement to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing uncontrollable debt from resulting in complete financial ruin. Accordingly, it is best treated as an option of last resort, because it can carry with it significant negative consequences, which must be weighed against the possible benefits. For example, filing for bankruptcy can heavily damage a person's credit rating.
Therefore, it is a good idea to talk with an veteran bankruptcy lawyer in Chickasaw, Alabama. They will be able to advise you on the likely legal and financial consequences of filing for bankruptcy, and help you determine if it's the right option for your. Because this determination depends heavily on the facts of each distinct case, the counsel of a Chickasaw bankruptcy attorney cannot be replaced.
Types of Bankruptcy in Chickasaw, Alabama
In Chickasaw, Alabama, there are 3 types of bankruptcy in common use: Chapter 7, Chapter 13, and Chapter 11. Because bankruptcy is a result of federal law, the procedures governing bankruptcy in Chickasaw, Alabama will be similar everywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the funds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the appropriate property is sold, and the proceeds directed to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will typically be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
Under Chapter 13 bankruptcy in Chickasaw, most of the debtor's debt is not discharged. Instead, the bankruptcy court, working with the debtor and participating creditors, work out a payment plan that allows the debtor to pay off most of his or her debts over an extended period of time, therefore theoretically making the debt far more manageable. Once a payment plan is approved by the court, creditors are prohibited from attempting to collect payment under their original agreements that gave rise to the debt in the first place. Though applicable to individuals, Chapter 11 bankruptcy is typically used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is finalized, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.
One major advantage of Chapter 11 bankruptcy is that it allows businesses to continue their operations while the process plays out. Moreover, their stock can still be bought and sold.
How Can a Chickasaw Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Chickasaw is not one to be made easily, and it definitely should not be made without first obtaining the advice of an efficient Chickasaw bankruptcy attorney.