Bay Minette, Alabama Personal Bankruptcy Lawyers

Being in a position where filing for bankruptcy is one’s only option for debt relief is something that no one ever plans for. Depending on your circumstances, living under mountains of debt may feel as though it snuck up on you, and perhaps that continuing to spend is the only way to continue providing for your family. When you are facing calls from relentless creditors, aren’t sure where to turn or what your legal options are, have been named in a lawsuit, and have exhausted your other debt-relief options, filing for bankruptcy may be your best option.

At the office of Padgett & Robertson, our Bay Minette, Alabama personal bankruptcy law firm understands what you’re going through and can help you navigate the bankruptcy process. Reach out to us today for a consultation and to learn more about filing for bankruptcy in our state.

When Should I File for Bankruptcy?

Filing for bankruptcy is not a decision anyone should make or take lightly; bankruptcy can be very beneficial, but there are also some serious consequences of filing for bankruptcy. Before you file, it’s important to consider all of your other options. Other ways that you may be able to experience some debt relief include:

Debt consolidation. One option for getting out of debt, and something that should be explored before you file for bankruptcy, is debt consolidation. Debt consolidation is the process of organizing all of your debts into a single debt; this way, you only have to worry about paying one loan each month, versus many, which can be overwhelming.

Mortgage modification. If you are a homeowner and you are falling behind on your mortgage payments, mortgage modification may be an option. The truth is that your lender does not want to foreclose on you—doing so is expensive for the lender. Instead, they want to find a way to help you make your payments on time and in full and are often willing to work with homeowners as such.

Debt negotiation with creditors. Like your mortgage lender, a creditor does not want to have to file a lawsuit against you to recover funds, which can be both expensive and fruitless for them. If you are able to repay a portion of your debt, your creditor would much prefer this. You may be able to negotiate your debts in order to reach an agreement that works well for both parties.

Selling your home. Depending on your financial situation, selling your home or other valuable assets may provide you with the cash that you need to get out of a debt. It’s important to speak with a financial professional first before choosing to do this.

What Type of Bankruptcy Should I File for?

If you have exhausted your other options and filing for bankruptcy is the best choice, then the next

thing to figure out is which type of bankruptcy you will file. There are two common types of personal bankruptcy: Chapter 7 and Chapter 13.

Both Chapter 7 and Chapter 13 have their own unique benefits. For example, in a Chapter 7 bankruptcy, a debtor will be able to discharge a greater amount of their debts; in a Chapter 13 bankruptcy, however, a debtor will likely be able to keep more of their assets, such as their home.

That being said, it won’t always be up to you to decide which type of bankruptcy you should file. If you earn over a certain income level, then you cannot file for a Chapter 7 bankruptcy, also known as a liquidation bankruptcy.

Debtors who have enough income to pay back a portion of their debts must do so by filing for a Chapter 13 bankruptcy and entering into a repayment plan. The repayment plan will last for three and five years; only after the terms of the repayment plan have been satisfied will the debtor be eligible to discharge any remaining debts.

Can I File for Bankruptcy More than Once?

Another common question that many people have is with regards to whether they can file for bankruptcy more than once. A debtor can file for bankruptcy more than once; numerous times, even. However, there is a required waiting period in between bankruptcy cases that a debtor must adhere to. The wait time depends on the type of bankruptcy filed and whether a discharge was granted. For example, the waiting period after a Chapter 7 bankruptcy discharge is eight years, whereas the wait time after a Chapter 13 bankruptcy discharge is only two years.

Will All of My Debts Be Forgiven if I File for Bankruptcy?

Another consideration when filing for bankruptcy is thinking about the types of debts you have. While most unsecured debts, such as credit card debt, can be discharged in a bankruptcy case, this is not true of all debts. Some people may file for bankruptcy thinking that doing so will take care of all of their debt problems, but this is simply not true.

For example, common types of debts that generally cannot be discharged include student loan debt, alimony payments, and unpaid child support. You should consult with an attorney about what types of debts can and cannot be forgiven.

How Will My Credit Be Affected if I File for Bankruptcy?

On another note, remember that filing for bankruptcy can definitely provide you with a clean financial slate and give you the opportunity to start over, but it is not without consequences. For example, filing for bankruptcy will negatively impact your credit score, and can make it harder for you to secure a loan, purchase a house, or even be hired for certain positions for 7 to 10 years.

But that said, your credit is already likely to be severely damaged if you are at the point where you are considering filing for bankruptcy. Bankruptcy often improves your credit after a few years. Once you file for bankruptcy the creditors will stop reporting balances due, late payments and it starts the clock running on when these accounts will be removed from your credit history.

Call Our Personal Bankruptcy Lawyers Today

At the law office of Padgett & Robertson, our personal bankruptcy lawyers understand that dealing with massive amounts of debt can feel overwhelming and even shameful in some cases. Our Bay Minette, Alabama personal bankruptcy attorneys want you to know that we are here for you, and that we have the experience that your case deserves. If you are facing large amounts of debt and are thinking about bankruptcy, please call us today at 251-342-0264, send us a message online, or visit our office in person at your convenience.