Consumer Bankruptcy Lawyers in Vestavia Hills, Alabama

Vestavia Hills 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 typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial 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 Vestavia Hills, Alabama before filing.

Chapter 7 Bankruptcy in Vestavia Hills, Alabama

In Vestavia Hills, Alabama, there are 2 typical forms of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and necessary personal items, like clothing. These assets are not available to creditors.

Once appropriate assets are sold, and the money turned over to the creditors, most remaining debt is excused. However, there are certain types of debt that cannot be excused in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Vestavia Hills, Alabama.

Chapter 13 Bankruptcy in Vestavia Hills, Alabama

Chapter 13 bankruptcy in Vestavia Hills, Alabama is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.

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Which Type of Consumer Bankruptcy Should I File in Vestavia Hills, Alabama

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct 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 Vestavia Hills, Alabama who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.

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