July 2023

If you find yourself struggling with overwhelming debts, mounting bills, and creditor harassment, you may wonder if bankruptcy is the right path to regain financial stability. However, it is important to remember that bankruptcy does not always provide a complete fresh start, nor is it suitable for every person with debt. 

So, in order to provide some clarity, here is a quick breakdown of the concept of bankruptcy, its impact, and the options available to you from David S. Clark, an experienced bankruptcy attorney in Auburn and Opelika, Alabama. 

What is Bankruptcy?

Bankruptcy is a legal process that provides individuals and businesses in financial distress with the opportunity to eliminate or reorganize their debts under the protection of the court. It is not a decision to be taken lightly, but it can be a valuable tool to help you achieve a fresh financial start.

If you’re an individual in Auburn or Opelika, there are two main chapters for personal bankruptcy that you should be aware of: Chapter 7 and Chapter 13. Each chapter serves different purposes and offers unique options and outcomes. Understanding the differences between these chapters is essential in determining the best path for your specific financial situation. 

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” is designed for individuals with a limited income and a small number of assets. In Auburn and Opelika this option allows eligible filers to discharge certain unsecured debts, such as credit card debt, medical bills, and personal loans, typically within a few months. For more information on secured vs. unsecured debts, click here!

To qualify for Chapter 7 bankruptcy, you must pass the means test, which compares your income to the median income in Alabama. If your income is below the state median, you are likely eligible for Chapter 7. However, if your income exceeds the median, you may still qualify based on a number of other factors. Ultimately, when it comes time to file for bankruptcy, an experienced bankruptcy attorney can help navigate this often confusing process. 

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also called “reorganization bankruptcy,” is available for individuals who have a more stable income but are struggling to keep up with their debts. Instead of liquidating assets, Chapter 13 creates a repayment plan that spans three to five years, allowing you to catch up on missed payments while keeping your assets. 

With Chapter 13 bankruptcy, you can potentially prevent foreclosure, stop vehicle repossession, and halt creditor actions, providing breathing room to address any and all financial challenges. Yet, as mentioned in Chapter 7, every bankruptcy case will be unique, so it is crucial to contact a dedicated bankruptcy attorney to see if Chapter 13 bankruptcy is right for you. 

The Importance of a Bankruptcy Attorney

Deciding whether bankruptcy is right for you requires careful consideration of your financial situation, long-term goals, a deep dive into your financial history, and any potential consequences. A qualified bankruptcy attorney can provide invaluable guidance throughout this process, helping you make the most informed decision possible.

Plus, the help of a dedicated bankruptcy attorney could mean the difference between a successful personal bankruptcy case and a return to the overwhelming financial situation you had prior to the bankruptcy process. 

David S. Clark, Your Auburn & Opelika Bankruptcy Attorney

Navigating the complexities of bankruptcy requires a comprehensive understanding of your options and their implications. Thankfully, you don’t have to do it alone! David S. Clark is an experienced bankruptcy attorney in Opelika, Alabama who is dedicated to supporting you on the path to financial recovery. 

Let us help you determine if bankruptcy is the right solution for your unique circumstances and guide you towards a brighter financial future. Contact David S. Clark today!