Filing for Chapter 7 bankruptcy in Alabama

Bankruptcy has long been used as an effective tool to offset the negative effects of debt, particularly consumer debt. Here in Alabama, a Chapter 7 bankruptcy filing involves a number of steps, from determining the amount of debt to engaging with creditors. With the help of a dedicated bankruptcy attorney, an individual in financial trouble can leverage Chapter 7 to get back on track. 

Understanding some of the specifics 

As a general rule, Chapter 7 allows an individual to liquidate their assets, with the help of a trustee, in order to pay down unsecured debt. Some debt cannot be resolved in this way. An individual typically cannot file for Chapter 7 to clear student debt, alimony, child support and certain taxes, for example. In most cases, however, a Chapter 7 liquidation allows the trustee to liquidate any allowable assets to pay down the most common forms of debt — for example, credit card debt. 

Certain debts, such as a vehicle or house, can be kept by virtue of reaffirmation. This allows an individual to retain ownership of their property even if money is still owed, but they must still sign a Reaffirmation Agreement that disallows the debt associated with this property to be wiped out via Chapter 7 for a total of six years. Additionally, in order to reaffirm a debt, it must be brought into good standing, and any back payments must be satisfied.  

Seeking help and support for these challenges  

The bankruptcy process may sound complicated to the average person, and the truth is it can be. This is why the support of an attorney through a Chapter 7 bankruptcy filing can make all the difference in the world. Here in Alabama, it is possible to secure those services in advance of filing for bankruptcy, offering people in debt trouble to get the support they need to handle their financial challenges in a healthy and positive way.