In Alabama, Elmore County courts outline all requirements for filing for any chapter of bankruptcy. Consumers who are facing legal action by their creditors can file a claim and get the automatic stay provided through bankruptcy. The chapter they select or qualify for determines the duration of the protection. A bankruptcy attorney in Tallassee, AL can help consumers choose the most appropriate chapter for them.

Details About Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a proposed repayment plan that consumers create with their attorney. The plan outlines what debts are included and how much the consumer pays each month to pay off the debts. The case lasts up to five years, and the consumer qualifies according to their current income level. They must have an income that is greater than the current median for their household size.

What Consumers Should Know About Chapter 7

To qualify for chapter 7, the consumer must have assets that have a total appraised value that is greater than their total debt balance. The court collects deeds and titles from the consumer and sells the assets to generate enough proceeds to pay off the creditors. The consumer has zero control over the process, and they don’t get to choose what assets are sold. The court appoints a trustee to sell the assets and distribute the proceeds to the claimant’s creditors. The entire liquidation process takes up to six months to complete.

How Are Debts Discharged?

The court determines what debts are eligible for discharge through the bankruptcy. The most common debts that are discharged are unsecured credit card debts or personal loans. The court isn’t likely to discharge government-based student loans. An attorney will offer their advice about debt discharge when preparing the claim.

Are All Consumers Debt-Free After Bankruptcy?

No, not all consumers get a fresh start after bankruptcy. However, with a suitable plan, it is possible to eliminate a higher volume of the current debts. Consumers who don’t have excessive debt are more likely to gain a fresh start through liquidation.

In Alabama, Elmore County courts determine if a claimant is approved for their preferred chapter of bankruptcy. Consumers have two primary choices when filing and must complete all requirements of their case. Consumers who need more info about these claims can contact a bankruptcy attorney in Tallassee, AL at Courtney & Mann LLP now.