Chapter 7 Bankruptcy Attorneys in Saraland, AL

Individuals facing overwhelming financial burdens and the stress of ever-increasing monthly payments often choose Chapter 7 bankruptcy as a way to get their finances back under control. While some worry that they are taking “the easy way out” when they file bankruptcy, we believe this is the wrong way to look at it. Bankruptcy is simply a legal process that gives consumers the option to get a fresh start when they truly cannot repay their debt. There is no reason to continue barely making it month after month when you could find relief through bankruptcy.

If you are considering bankruptcy in Saraland, AL, why not set aside some time to talk to an attorney who can guide you through the process? Call Padgett & Robertson at 251-336-3695 to set up a consultation with our team now.

What is Chapter 7 Bankruptcy?

Known as liquidation bankruptcy, Chapter 7 bankruptcy allows consumers who meet certain requirements to get their qualifying debts discharged. The debtor must file a bankruptcy petition with the court, at which point their creditors must stop trying to collect any payments from them. This is often a huge relief to borrowers, who may have been plagued by collection calls and emails for months prior to filing. In this way, borrowers get immediate (but temporary) relief from their debts. Permanent relief comes at the end of the process.

The trustee assigned to your case will review your assets to find any nonexempt assets that can be sold to repay your creditors. While it is possible to have some assets seized, most people are able to protect all of their assets via exemptions. After a meeting of the creditors, also known as a 341 meeting, the court grants your bankruptcy, and your qualifying debts are discharged.

Qualifying for Chapter 7 Bankruptcy

While Chapter 7 bankruptcy can provide massive relief to families in significant amounts of debt, it is not available to everyone. You must meet specific criteria to file.

To start, the means test will be applied to your financial situation. The means test compares your income to the median income for your household size in Alabama. Individuals whose income falls below the state median generally qualify, but those who exceed the median may have to take additional steps to prove that their financial situation qualifies.

For those who earn more than the state median income, the means test will look at their disposable income after accounting for debts and other expenses. Those below a certain amount may be able to file for Chapter 7 bankruptcy.

There’s also a limit on how often you can file for bankruptcy. If you had debts discharged via Chapter 7 bankruptcy within the previous eight years, you will not be able to file again.

Debts Discharged in Chapter 7 Bankruptcy

The majority of debts are discharged in a Chapter 7 bankruptcy, including:

• Medical bills

• Personal loans

• Credit carts

• Payday loans

• Utility bills

• Certain types of tax debt

There are some that are not included in Chapter 7 bankruptcy. Debts excluded from bankruptcy include student loans, alimony payments, child support, and certain types of tax debts. If you’ve incurred any debt due to your own misconduct, you can also not discharge that in bankruptcy. This includes, for example, criminal fines, restitution, and debts resulting from personal injury lawsuits against you.

It’s also important to recognize how secured debt is treated in Chapter 7 bankruptcy. You can absolutely get secured debts wiped out with Chapter 7 bankruptcy—but remember that those debts are secured by the assets they funded. You will lose those assets if you allow the debt to be discharged. This can mean losing your home or vehicle. If you want to keep the asset tied to the debt, you will need to reaffirm the debt and continue making payments on it.

Rebuilding Your Credit

Some people hold off on filing for bankruptcy because they fear what can happen to their credit. This often means that people continue to make minimum monthly payments on debts for months beyond the point at which they recognize they are in trouble, only to file bankruptcy anyway. While bankruptcy does negatively impact your credit, it is a temporary effect. The biggest hit comes immediately after your discharge is granted. At that point, you can begin taking steps to repair your credit.

First, you have to work on your relationship with money. People who jump right back into life as normal without recognizing what led to bankruptcy in the first place are likely to face the same issues in the future. While the educational courses required in bankruptcy can be helpful, they are often not enough. It’s important to learn how to manage a budget, account for unexpected expenses, and bounce back if you get into a small amount of debt.

Once you are able to take out a secured credit card or another safe form of credit, be committed to making your payments on time, every time. On-time monthly payments can go a long way toward repairing your credit.

How Our Firm Can Support You During This Process

The process of filing for bankruptcy can be overwhelming. There’s a lot at stake, and the amount of documentation and paperwork required is unlike anything you’ve done before. Failing to fill out the paperwork accurately or missing an important deadline can lead to unnecessary delays or having your case dismissed—and that means going right back to unmanageable monthly payments.

This is a crucial step in taking control of your finances, and it’s worth hiring a professional to help you navigate bankruptcy. Our firm understands what bankruptcy means to families like yours, and we’re committed to helping you pursue a fresh start. Let us tackle the legal side of your bankruptcy while you plan for your next steps.

Contact Padgett & Robertson to Find Out If Bankruptcy is the Right Choice for You

Are you ready to file for bankruptcy in Saraland, AL? It’s time to talk to our team of Chapter 7 bankruptcy lawyers. Call Padgett & Robertson at 251-336-3695 or reach out online to set up a consultation now.