Bankruptcy Generally

Alabama Bankruptcy Overview

At Grainger Legal Services, our goal is to offer long term solutions to those who are deeply in debt and overwhelmed. We understand the stress many people feel with respect to financial difficulties. The federal bankruptcy process is designed to give debtors a fresh start. Seasoned Montgomery bankruptcy attorney Charles Grainger can review your circumstances and represent you through this process. We work with individuals who are struggling with debt, and also assist Alabama businesses in filing for bankruptcy under Chapter 7.

What is a Bankruptcy Discharge?

Bankruptcy is a process set forth in the Bankruptcy Code, Title 11 of the United States Code, whereby consumers and businesses can be released from liability for certain debts. In consumer bankruptcy, the goal of "bankruptcy discharge," or getting your debts eliminated, is to prevent creditors from suing you or garnishing your wages subsequent to a lawsuit to recover the amount of the debt you owe. Filing for bankruptcy can also be used to stop your home from being foreclosed upon, and prevent your vehicle from being repossessed.

Bankruptcy discharge eliminates certain debts, but may not release all of them. Certain kinds of creditors have rights that survive bankruptcy. For example, if you owe alimony, child support, or student loans, these debts will generally survive. Unsecured debts (debts not secured by collateral), like credit card debt or medical debt, are likely to be eliminated through discharge. A knowledgeable Alabama bankruptcy attorney can advise you as to which of your debts can be discharged, and help you pave the way towards a better financial future.

Types of Bankruptcy Relief in Alabama

There are six kinds of bankruptcy covered by federal law. These include two very different types of bankruptcy, Chapter 7 and Chapter 13, which apply to most people who are looking for ways to handle overwhelming consumer debt.

Chapter 7 bankruptcy is a faster process than Chapter 13, taking only about four months in most cases. Chapter 7 bankruptcy is for those with incomes lower than Alabama's median income for a household of the same size, and not much disposable income. This process is also called liquidation because some of your property will be taken and sold to repay creditors. Each state has its own rules regarding what amount of property will be protected or "exempt" from liquidation. Some states permit a debtor to elect to use federal bankruptcy exemptions, but in Alabama, you must use the state's exemptions. Those who are married and file for joint bankruptcy in Alabama can double their exemption amounts, such that each one can claim a full exemption amount for the property that belongs to him or her.

Chapter 13 bankruptcy has several advantages over Chapter 7, if you have sufficient income, but it does take longer to obtain a discharge— generally three to five years. Chapter 13 requires you to reorganize your debts. You must make monthly payments to reduce or eliminate the amount you owe creditors. Among the advantages of filing for Chapter 13 relief is that you can usually keep your house. This type of relief also gives you a chance to get caught up on missed car or house payments.

Retain an Experienced Alabama Bankruptcy Attorney

There are many negative myths surrounding bankruptcy. The relief that can be obtained by filing bankruptcy can be substantial, allowing you to start over with a clean slate. Montgomery bankruptcy lawyer Charles Grainger can give you sound legal advice and facts about bankruptcy. He can explain how the process works and represent you through the process. Mr. Grainger serves clients in South-Central Alabama from his offices located in Montgomery, Prattville, and Troy. Call us at (334) 260-0500 or contact us online to schedule a consultation.