Citronelle, Alabama Personal Bankruptcy Attorneys

Facing large amounts of debts is extremely stressful, nerve-wracking, and often embarrassing and shameful. For many, debt sneaks up on them—people may be experiencing financial hardship as a result of medical bills, student loans, an unexpected emergency, the loss of a job, or numerous other circumstances that are out of their control.

If you have been drowning in debt and are unsure of your legal options or what you’ll ever do to get things under control, our personal bankruptcy attorneys serving clients in Citronelle, Alabama can help. Please reach out to our lawyers directly to learn more about your options and how we can serve you.

Understanding Bankruptcy: The Basics

Bankruptcy is a court-facilitated process during which individuals and businesses can seek debt relief. However, it’s important to note that there are multiple different types of bankruptcies, and that not all will offer the same debt-relief options. What’s more, not all types of debts are dischargeable in a bankruptcy filing, and there are other consequences of filing for bankruptcy (discussed in more detail below). Here is  a brief overview of how the basic process works:

• A debtor will file a petition to kickstart the bankruptcy process. This petition will need to thoroughly detail the debtor’s financial situation.
• The automatic stay will go into effect. The automatic stay is an immediate hold on creditors’ ability to contact you to collect on any outstanding debts.
• You will answer questions before the court about your finances during the creditors’ meeting.
• You will be required to attend mandatory credit counseling.
• Depending on the type of bankruptcy for which you file, you will either begin liquidating assets (managed by the bankruptcy trustee) to pay back creditors, or you will enter into a repayment plan with your creditors.
• Your remaining debts will be discharged at the end of the process.

Of course, the process above is just an outline; it’s best to consult with an experienced Citronelle, AL bankruptcy attorney who can explain each step in more detail and ensure that you are prepared for what’s to come.

Types of Personal Bankruptcy

For individuals who are filing for bankruptcy, there are two primary types: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy. Also called liquidation bankruptcy, a Chapter 7 bankruptcy is for debtors who pass the means test as a result of not having the means (income) to repay a portion of their debts. In this type of bankruptcy filing, a debtors’ nonexempt assets will be liquidated, and the proceeds will be used to pay back creditors to the extent possible. Then, any remaining debts will be discharged. This type of bankruptcy will remain on one’s credit report for 10 years.

Chapter 13 bankruptcy. A Chapter 13 bankruptcy, often called a wage-earner’s bankruptcy, is for those who have the income to pay back all or a portion of their debts. As such, rather than liquidating all nonexempt assets, a debtor will enter into a repayment plan with creditors that will last for between three to five years. At the end of the repayment plan, assuming the terms of the repayment plan have been fulfilled, then the debtor’s remaining debts will be discharged. This type of bankruptcy remains on one’s credit report for 7 years.

Benefits of Filing for Bankruptcy

There are many benefits to filing for bankruptcy, especially for those who have explored other debt-relief options unsuccessfully. For example, one benefit of filing for bankruptcy is the automatic stay, discussed above. Another option is that it may truly be the only way to get out from under massive amounts of debt. In some cases, filing for bankruptcy can help a person to save their home from foreclosure; it can also lead to a sense of empowerment and financial security moving into the future.

What to Know About Bankruptcy

In addition to understanding the basics of the process, the types of bankruptcy, and the benefits of filing for bankruptcy, you should also know the following:

Consequences. While filing for bankruptcy can get you out from under debt, it also has some consequences. As mentioned above, both a Chapter 7 and a Chapter 13 bankruptcy will remain on your credit report for 7 to 10 years. This can make it hard to get a line of credit, buy a house, or even get a job in some cases, depending on your industry.

Mandatory credit counseling. Another thing to know about filing for bankruptcy is that before your bankruptcy case can proceed, you’ll be required to enroll in Your attorney can assist you in finding an approved course and understanding this requirement.

Restrictions on debt forgiveness. Many people think that bankruptcy will simply wipe out all of their debts, but this is not true. In some cases, you may be required to sell your personal assets to pay back debts, may be required to pay back debts through a repayment plan, and may be barred from having certain debts discharged. For example, student loan debt is generally not forgivable in a bankruptcy case.

How Our Citronelle, Alabama Personal Bankruptcy Law Firm Can Help

When you call our Citronelle, Alabama personal bankruptcy law firm, you can count on our bankruptcy lawyers to be by your side every step of the way. We know how stressful debt is, and that the bankruptcy process is confusing. We’ll work with you to explain the process, review your financial situation and make wise recommendations, prepare your bankruptcy petition, represent you during all of your bankruptcy hearings, and more. Our lawyers have years of experience and always put our clients’ best interests first.

To learn more about our legal services, our experience, and how our Citronelle, Alabama personal bankruptcy law firm can help you, please call us directly today or send us a message at your convenience. Our lawyers are here to help. You can reach us in our law office at 251-342-0264.