Seasoned Bankruptcy Lawyer Represents North Alabama
Filing for bankruptcy is never easy. Fortunately, Bevill & Bevill, LLC has been helping North Alabama families obtain bankruptcy relief for nearly 20 years.
Chapter 7 Bankruptcy
Generally speaking, filing for Chapter 7 bankruptcy allows you to start over by eliminating most of your debt. Chapter 7 bankruptcy is a liquidation wherein a trustee collects and inventories your assets, selling any and all assets that are not exempt. The proceeds of this liquidation are then distributed to your creditors, minus the commission received by the trustee.
There are specific debts which cannot be discharged, including alimony, child support, fraudulent debts, various taxes and student loans. For most Alabama families, filing for Chapter 7 bankruptcy allows you to completely eliminate all of your debts.
Reaffirming Your Debt(s)
Under Alabama state law, you may hold on to certain secured debts, including your car, oversized possessions (i.e. furniture) and/or house. In order to do so, you must sign a voluntary Reaffirmation Agreement. Keep in mind, however, that you cannot eliminate that debt for another six years. You will still be responsible for that debt and must continue paying it down, just as you were doing before filing for bankruptcy.
Chapter 13 Bankruptcy
If you file for Chapter 13 bankruptcy, you must propose a 3-5 year repayment plan in which you offer to pay your creditors all or part of your debts using future income. You may use Chapter 13 to prevent your home from being foreclosed upon and/or make up missed car or mortgage payments. Chapter 13 bankruptcy also allows you to pay back taxes, prevent interest from accruing on your tax debt and maintain possession of valuable, non-exempt property. Keep in mind that in order to file for Chapter 13 bankruptcy, you must have a regular source of income.
Advantages to Filing for Chapter 13 Bankruptcy
Chapter 13 bankruptcy is generally used by debtors who’d like to maintain possession of secured assets, such as their home or vehicle. Simply put: Chapter 13 bankruptcy is a reorganization, whereas Chapter 7 bankruptcy is a liquidation. Chapter 13 bankruptcy also allows you to resolve overdue payments over time. In other words, if you have valuable, nonexempt property and wish to hold onto it, Chapter 13 may be your best bet.