When bills and debts begin to pile up and are overwhelming, you may feel that it will be impossible to ever come out on the other side. It may seem that the more you try to get ahead on your debts, the worse you sink into the spiral of missed payments and building interest that continues to grow your debt each and every day.
Living like this can feel extremely stressful, and at times even hopeless. The good news is that in Alabama you do have options for creating a fresh financial future. Here is some information about one of options some individuals pursue to combat debt struggles: bankruptcy.
Bankruptcy may be the best choice
Oftentimes people hear the word “bankruptcy” and they immediately think that if they filed for bankruptcy their entire financial future would go down the drain for many years to come. However, the truth of the matter is that in some cases, bankruptcy might actually be among the smartest and most financially sound choices you could make. When you let your debts continue to go unpaid and interest builds, as well as your credit record declining in the process, you typically are only allowing a serious problem to deteriorate further.
Bankruptcy aims to give you a fresh financial start. Although there are some restrictions and complications depending on the type of bankruptcy you choose to file and depending on your particular situation, the general rule is that bankruptcy can help you clean the slate and start over.
Bankruptcy in Alabama
Two of the more common types of bankruptcy individuals Alabama may consider are Chapter 7 and Chapter 13. These two types of bankruptcy have some key differences regarding issues such as with how debt is handled in the bankruptcy and how the filing affects your property and your ability to keep your assets. In Chapter 13, the law allows you to reorganize your debt so that you can keep important assets such as your home. In this situation, you would pay a monthly amount set in the plan. Meanwhile, in Chapter 7 bankruptcy, you can get debts discharged, but certain assets might be liquidated to allow creditors to recoup what they can of what you owe.
The type of bankruptcy you file also depends on which type you qualify for based on your income and circumstances. In order to understand which type is the better one for your situation, it is best to have a consultation with a qualified bankruptcy attorney who can assist you in evaluating your situation and planning how to proceed.