Consumer Bankruptcy Lawyers in Spanish Fort, Alabama
Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant 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 Spanish Fort, Alabama before filing.
Chapter 7 Bankruptcy in Spanish Fort, Alabama
In Spanish Fort, Alabama, there are 2 main forms of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some types of debt, however, can't be discharged in Chapter 7 Bankruptcy in Spanish Fort, Alabama. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Spanish Fort, Alabama
Chapter 13 Bankruptcy in Spanish Fort, Alabama differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the agreements that gave rise to the debt in the first place. This results in a new payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
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Which Type of Consumer Bankruptcy Should I File in Spanish Fort, Alabama
Which Bankruptcy type to file under depends heavily on the facts of each individual case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
Whatever your situation, you should speak with a local Spanish Fort, Alabama bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.