Bankruptcy is a legal process that provides a fresh financial start when you are burdened by overwhelming debt. In Alabama, just like in other states, there are two main types of bankruptcy for individuals that serve various purposes and help different financial situations. Understanding these different types is essential for anyone considering filing for bankruptcy. In this blog post, we will explore the main types of bankruptcy for individuals in Alabama and shed light on how they can help people regain control of their finances.
A Chapter 7 bankruptcy is also called the fresh start provision of the bankruptcy code. Chapter 7 allows you to wipe out all your debt and get a fresh start. In a Chapter 7 bankruptcy, we show the court that you are unable to pay the debt that is currently hanging over your head based on your budget. Typically, from the time that we file your chapter 7 bankruptcy petition, you are granted a discharge in about 90 days. In 90 days you will no longer have that debt.
A Chapter 13 bankruptcy is called a lot of things. It has been called debtors court. Many people refer to it as the “catch your breath” bankruptcy. Regardless of what it’s called, Chapter 13 bankruptcy is designed for people who work and get a paycheck, but are overwhelmed with creditors who want to be paid today. A Chapter 13 bankruptcy allows those people to pay back their creditors on a reasonable, more manageable basis. This is why it’s called the catch your breath provision; because it gives you time to catch your breath while you pay your creditors. It stops the phone calls, stops lawsuits, stops garnishments, and gets you on a level playing field against the mountain of debt you’re facing.
Bankruptcy is a powerful tool for people in Alabama facing overwhelming debt. Understanding the different types of bankruptcy available is crucial in determining the most appropriate solution for your financial situation. We can help you navigate the complexities of the bankruptcy process and determine the best course of action. Remember, bankruptcy is not a one-size-fits-all solution, but with the right guidance, you can take the necessary steps toward a brighter financial future.
If you’re considering filing for bankruptcy, please contact us by calling 205-875-8197 or by using the contact form below. We look forward to helping you through the bankruptcy process!