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August 2022

How to File Bankruptcy in Alabama

By Bankruptcy Law, Financial Tips No Comments

Filing for bankruptcy in Alabama can be overwhelming–but it doesn’t have to be.

Facing financial challenges is a part of life. But if you’re one of the millions struggling financially due to a job loss, illness, or another event in Alabama, bankruptcy was created to help. Here, you’ll find an explanation of Chapters 7 and 13, how to file for bankruptcy, and that you don’t have to do it alone. 

Of course, it is important to remember that bankruptcy is a complicated law that can be confusing without a professional bankruptcy attorney’s proper guidance and necessary advice. If you are an Auburn or Opelika, Alabama resident, contact the bankruptcy attorneys at David S. Clark today!

DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Need Bankruptcy Help? Call David S. Clark

What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy is also known as “Entitled Liquidation.” This means that a court supervised trustee takes over the assets of a debtor’s estate, turns them into cash (liquidates them), then distributes funds to creditors. In Chapter 7 the debtor has rights to make certain assets exempt.

Since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 those seeking Chapter 7 Bankruptcy must undergo a “means test” to determine whether or not they qualify. There are income thresholds throughout Alabama that, if a debtor exceeds, will disqualify the debtor from being able to declare Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy is also known as a “Wage Earner’s Plan”. This is usually a more desirable avenue for debt relief than Chapter 7 because it enables a customer to keep certain valuable assets out of a creditor’s reach. The debtor then proposes a plan with a help of a bankruptcy attorney to repay creditors over a reasonable period of time.

Will Filing Bankruptcy in Alabama Erase My Debts?

Bankruptcy has the ability to wipe out many types of dischargeable debts. When you receive your discharge at the end of your case, you are no longer legally required to pay any of these debts and creditors cannot come after you to collect them. These typically include:

  • Credit Card Debt
  • Medical Bills
  • Payments on Motor Vehicles
  • House Payments
  • Debts Related to Your Business
  • Personal Loans

But you can’t discharge all debts. Nondischargeable debts, like student loans, child support, fines, and taxes, will not be included in your bankruptcy discharge. Ultimately, dischargeable debts exist because the benefit to a creditor and society as a whole outweighs the benefit that the debtor would gain if their debts were completely discharged. 

Hiring a Bankruptcy Lawyer in Alabama

With the extensive paperwork, financial documentation, laws, and Alabama procedures present in a bankruptcy filing, hiring an experienced bankruptcy attorney to represent you in bankruptcy is very important.

With over 25 years of combined experience, the attorneys at David S. Clark are here to help any Auburn or Opelika resident navigate through bankruptcy. For more information on how you can find financial peace through bankruptcy, contact David S. Clark today!

DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Will Bankruptcy Take My Home?

By Bankruptcy Law, Financial Tips, Foreclosure No Comments

Here’s how you can keep your home and get financial freedom with bankruptcy.

According to Statista, in June of 2021, Alabama had the highest bankruptcy filing rate in the United States with 306.37 residents per 100,000 filing for bankruptcy. 

Often, bankruptcy tends to have a negative connotation that causes it to be viewed as a sign of defeat or failure, but it can be an effective tool that helps Alabama residents regroup and successfully move forward. Ultimately, bankruptcy laws were created in order to help Alabama residents, not hurt them.

Thus, if you are scared to file for bankruptcy because you could lose your home, you don’t have to be. Here’s how you can keep your home and get financial freedom from the experienced bankruptcy attorneys at David S. Clark in Opelika, Alabama. 

DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.

Need Bankruptcy Help? Call David S. Clark

Consider The Type of Bankruptcy

There are two main types of bankruptcy: Chapter 7 and Chapter 13. While there are a lot of differences between the two, the major point of contention comes from the differing exemptions to which you are entitled. 

Property that is exempt generally includes the sort of items that are necessary for living or working (more formally known as the “necessities of life”). While bankruptcy law is foremost concerned with giving debtors a new start, there are still non-exempt properties. Non-exempt property generally covers all items that fall outside of these important necessities of life. 

Court rulings and bankruptcy practice experience have established a general idea of what types of property are necessary to live. Below are a few examples of exempt properties that Chapter 7 and Chapter 13 bankruptcy grant.

Chapter 7

  • Cars (up to a certain value)
  • Reasonably necessary clothing
  • Household appliances
  • Jewelry (up to a certain value)
  • Pensions
  • A portion of the equity in your home
  • Tools of the debtor’s trade or profession (up to a certain value)
  • A portion of unpaid but earned wages

Chapter 13

  • Cars
  • Family homes or “Homestead”
  • Personal items (clothes)
  • Household appliances and furniture
  • Jewelry

Consider Your Home Equity

At first glance, it can be disheartening to know you may lose your home if you file for Chapter 7 bankruptcy. Yet, there are still ways for you to keep it. When a trustee is deciding whether your home will be exempt, the overall equity of your home is their only consideration. 

Equity is the market value of your house minus the balance on your mortgages or loans. It is important to consider and calculate your home equity because equity under the exemption limit means you can keep your home after you’ve filed for bankruptcy. 

Unfortunately,  if you have equity in your home over the exemption limit, you may be forced to sell your house to pay your debt or “buy it back” by paying a trustee your overall home value. 

Life After Bankruptcy

As long as you continue to pay the mortgage, you are free to keep your home after bankruptcy. Yet, if you are unable to pay, the bank may eventually foreclose your home. 

If you are an Auburn or Opelika, Alabama resident facing foreclosure, you are not alone. David S. Clark is a foreclosure defense attorney that is able to help you navigate the difficult waters of home foreclosures.

Auburn and Opelika Bankruptcy Attorney David S. Clark

David S. Clark is an experienced Auburn and Opelika Bankruptcy Attorney that understands the intricacies, complications, and stress that bankruptcy can present. If you need help navigating Chapter 7 or 13 bankruptcy, contact David S. Clark today!

DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.