The answer depends on
what type of bankruptcy you are filing.
Personal bankruptcy is Chapter 7 and it allows an individual or a family to get a fresh start by having most types of debts discharged. It stops the creditors from calling, stops garnishment of your wages, lawsuits, an eviction, and most foreclosures.
In order to collect any monies from you, creditors must seek
permission from the Bankruptcy Court.
Chapter 13 is a business or personal filing which allows you to reorganize your debt. With Chapter 13 you will be expected to make payments on a regular schedule that is set by the court.
Documents Needed for Personal Bankruptcy Filing
As part of your filing you will be required to take a credit
counseling course offered by companies preapproved by the bankruptcy
administrator. After the two-hour course you will receive a certificate of
completion. That should be included in the documents you provide to the
courthouse when you file your case.
You will also need a financial management course before filing. Proof of this also must be included in the filing. You will need to download or obtain all of the forms required for an Alabama bankruptcy.
Don’t feel overwhelmed. There are about 23 separate forms that require a summary of your assets and liabilities, a list of all property you own such as a house, clothes, and furniture. You will also have to list all bank accounts, stocks, bonds, and life insurance. You will have to state how much you make each month and your expenses.
After filling out the forms, make sure you check them for accuracy.
Other documents needed include:
*Your recent tax return – If you don’t have one, you will have to file your taxes.
*A copy of your credit report from three agencies
*A list of every one of your debts
* Include the mailing address of the above
* All pay stubs for the last six months – You must prove you have less income than most Alabamians. If not, you must file for Chapter 13 bankruptcy instead.
Chapter 13 bankruptcy is used when you are still earning wages but need to consolidate your debts. You must come up with a payment plan under Chapter 13.
It is not necessarily true that you will lose all of your property when you file a Chapter 7 bankruptcy.
There will be a list of exempt properties you should include in your filing. They include:
- Homestead – You can keep up to
$15,000 in equity and up to 160 acres in property with the house on it, which
can also include a mobile home or similar structure. If you are married and you
both are filing for bankruptcy, the exemption for property will double if you
both have ownership in the property, bringing it to a $30,000 in exemption.
- Automobile – While the state does
not have a specific exemption for a motor vehicle, you can use what’s known as
a “wild card” exemption to protect ownership of your car.
- Personal Property – If you own a burial
plot, clothing, family photos or portraits, books, even life insurance proceeds
can be considered exempt personal property.
- Retirement Account – Any IRA, Roth IRA, or
a retirement account is exempt if it’s qualified under the Internal Revenue
- Tools of the trade – be sure to list any uniforms or arms you’ve acquired if you are in the military, which is exempt under Alabama Code.
Some debt is not exempt. That includes child support, alimony, payments due to drunk driving, student loans, and a most tax debt.
In order to file for Chapter 7 bankruptcy in Alabama, the fee is $335.
Consumer Law Assistance with Bankruptcy
While the forms you need to file Chapter 7 are online, you are sure to have questions. Make sure you ask them before filing as it will be difficult to amend your filing afterward.
A consultation with an experienced bankruptcy personal injury law firm will help you determine which is better for your current circumstance – Chapter 7 or Chapter 13.
We can work with you on
constructing a payment plan to take care of your debts and create a realistic
plan for repayment when we consider your income.
If you have medical bills
expected to continue in the future, we should discuss which bankruptcy might
best suit your needs. Once you have filed Chapter 7, you cannot do so again for
at least eight years.
There are so many variables with bankruptcy, and it is easy to make a mistake if you do not have strong legal counsel. Consulting with our experienced bankruptcy lawyers at the Cochran Firm – Birmingham will keep you from making mistakes and help preserve your assets and credit score to the best of your ability.
Please message us online or call our Birmingham office at (205) 994-8555 for a free initial consultation with a member of our legal team.