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The Benefits of Chapter 7 Bankruptcy for Opelika & Auburn Residents

By | Bankruptcy Law, Chapter 7 Bankruptcy | No Comments

Chapter 7 Bankruptcy is a particularly helpful option in bankruptcy code for Auburn and Opelika residents who have a current monthly income that falls below the state median monthly income.

Many Opelika & Auburn residents are very hesitant to look into declaring bankruptcy to find relief from their numerous debts that they are unable to repay because declaring bankruptcy is often looked down on by the public.

Bankruptcy, however, is a perfectly legitimate form of debt restructuring that has helped countless Americans escape financial ruin since its adoption into United States law.

Chapter 7 Bankruptcy is a particularly helpful option in bankruptcy code for Auburn and Opelika residents who have a current monthly income that falls below the state median monthly income.

Here are some of the benefits of Chapter 7 Bankruptcy in Opelika and Auburn, AL:

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

Chapter 7 Bankruptcy Helps Those With Little Financial Resources

Chapter 7 Bankruptcy is specifically designed to assist those on the lower end of the financial system gain relief from their debts.

This is accomplished by those who wish to file Chapter 7 Bankruptcy being subject to the means test mentioned earlier.

Chapter 7 Bankruptcy Doesn’t Make You Face Creditors Alone

In every Chapter 7 Bankruptcy case, the court assigns an impartial case trustee to help mediate between you and your debtors. These trustees are assigned as impartial case managers for the state.

They aren’t working to make money for the creditors and they also aren’t working to magically make your debts appear. They are seeking the best route forward for both parties.

Though this case trustee is a helpful and necessary player in Chapter 7 Bankruptcy cases, he or she is not a bankruptcy attorney.

Chapter 7 Bankruptcy attorneys have a fiduciary duty, a duty to put your interests above any others. So, even with the benefit of having impartial case trustees in Chapter 7 bankruptcies, an Opelika/Auburn bankruptcy attorney is an important asset to your team because he or she will advocate explicitly for you.

The Chapter 7 Discharge

A discharge in Chapter 7 bankruptcy cases is one of the greatest protections that is offered to debtors against creditors in the bankruptcy process.

When a person files for bankruptcy, he or she gives immense power to the courts, the court appointed trustee, and their creditors. This is a frightening step for many debtors, and rightfully so. With a Chapter 7 discharge, however, many fears that a debtor might have of losing all of his or her civil rights because of debts owed are laid to rest because it frees debtors from the personal liability for many of their debts and it prevents creditors from taking collection action against them.

Given the nature of Chapter 7 bankruptcy as a means by which debts can be paid, there are many exceptions present in a Chapter 7 discharge clause. This is one of the many areas that hiring a qualified Chapter 7 Bankruptcy attorney can be an asset to you.

A good Auburn/Opelika Chapter 7 Bankruptcy attorney knows the ins and outs of these discharges and can guide you through this process.

David S. Clark, Chapter 7 Bankruptcy Attorney

Because of the complexity of Chapter 7 Bankruptcy, its benefits are often out of reach for most Opelika or Auburn residents because they don’t hold a law degree.

This is why hiring a reputable Auburn/Opelika Chapter 7 Bankruptcy attorney like David S. Clark can be an important factor in successfully filing for Chapter 7 Bankruptcy.

If you are looking to file Chapter 7 Bankruptcy in Auburn or Opelika, AL contact us today for a free case consultation and get your life back on the path toward financial freedom!

For more information about Chapter 7 Bankruptcy visit the United States Courts’ “Chapter 7 – Bankruptcy Basics.”

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.

Avoiding Foreclosure in Auburn or Opelika, AL

By | Attorneys & Lawyers, Foreclosure | No Comments

When you fail to pay massive mortgage payments, your dream home can quickly turn into a nightmare.

The U.S. housing market has proven resilient during the pandemic, and Alabama has been no exception. While Auburn and Opelika home sales positively increased during the pandemic, mortgage rates are continuing to rise. 

These higher rates transform the once affordable asking price of a house, into a dangerous growing expense for homeowners. 

Because higher interest rates make mortgages less affordable on a monthly basis, it can quickly cause you to fail to pay your mortgage at all. 

Banks quickly act on payment failures, leading to a difficult process known as foreclosure. This is the legal process where your mortgage company obtains ownership of your home. 

This process can produce long-lasting and stressful consequences, but it can be avoided. 

When foreclosure is imminent, Auburn or Opelika Alabama residents may need a foreclosure defense attorney to avoid such a crisis. 

Why Hire an Opelika Foreclosure Defense Attorney? 

Knowing the options available to you when attempting to fight a foreclosure and navigating the technicalities of them can be daunting for anyone. 

Hiring a foreclosure defense attorney can be the difference between sinking and swimming for you when navigating these dangerous waters.

From stacks of paperwork to multiple intimidating meetings, if you are caught in the vast legal landscape of foreclosure or if you are only beginning the process, a foreclosure defense attorney can change the result of foreclosure in some key ways: 

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

Loss Mitigation 

Loss mitigation is the process of protecting homeowners from foreclosure. It refers to several strategies that could be employed to keep homeowners current on their mortgage payments while remaining in their homes. 

Before beginning the process of receiving loss mitigation, homeowners will be required to submit a loss mitigation application. 

This application includes personal information, property information, and mortgage terms. It may also require pay stubs, tax returns, and financial statements. 

Without accurate information in each of these categories, foreclosure could still occur. 

Without an attorney you would likely have no idea how to navigate loss mitigation in order to avoid foreclosure on your home. 

There are many strategies that can mitigate loss. Some of the most common are repayment plans and forbearance plans.

Repayment Plans

If you missed payments due to sickness or job loss, repayment plans can be negotiated to add payments to make up for the payments missed. 

Forbearance Plans

Forbearance plans allow the homeowner to make reduced payments for a specific period of time. These allow you to get out of a financial hardship and can put you in a position to negotiate new repayment plans.

Modification of Your Loan

Loan modification is a change in the original terms of your mortgage loan. In order for someone to apply for this option, homeowners must provide financial information, mortgage terms, and the specifics of the financial hardship. 

The accurate presentation of these requirements is crucial. 

Foreclosure defense attorneys can ensure that all of your loan information is reported correctly, so that you have the best chance of modifying your loan. 

There are various ways that your loan can be modified. Some of the most common modifications are:

Payment Amount

This is the most common method of loan modification. 

Banks modify a homeowner’s existing mortgage payment to a more affordable amount (though you will usually have to pay more in the long run). This can lessen financial stress and place you back in good standing with the bank. 

Length of the Loan

Length of a loan is another consideration in the loan modification process. Rather than decreasing the overall payment, banks can lengthen the repayment period in relation to a homeowner’s financial situation. 

Interest Rate

With all mortgages, homeowners pay back a portion of the amount borrowed plus interest every month. In this method of loan modification, these interest rates can be altered to lower percentages, creating a more affordable total payment. 

David S. Clark–An Auburn/Opelika Foreclosure Defense Attorney

Facing the threat of foreclosure is a scary and difficult process to navigate, but you don’t have to do it alone!

David S. Clark is a dedicated Auburn/Opelika foreclosure defense attorney that will do everything in his power to help you avoid foreclosure. 

Contact David S. Clark, Attorney At Law and get your free consultation 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.

How COVID-19 Is Affecting Bankruptcy Law in Alabama

By | Bankruptcy Law, COVID-19, Understanding Bankruptcy | No Comments

Seeking bankruptcy in Auburn or Opelika will look a bit different after the COVID-19 pandemic. Make sure your bankruptcy attorney knows about these changes and is prepared to help you understand them.

There seems to be no area of society that the COVID-19 virus has not affected. 

One of the most significant effects and hotly contested issues is the role that this pandemic has played in the economic downturn that our entire country has experienced.

One thing that is certain, though, is that COVID-19 has made many people in Alabama suffer financially.

As an avenue for financial relief during personal economic crises, Chapter 7 and Chapter 13 Bankruptcy have, unsurprisingly, had some rules changed

Residents of Auburn and Opelika who are seeking to file bankruptcy should be aware of these changes so that they can take advantage of their benefits to debtors seeking relief.

Under the CARES Act and the Consolidated Appropriations Act of 2021 here are some of those changes:

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

Chapter 13 Payment Extension

If debtors can prove to their local bankruptcy court that they have endured a financial hardship due to the COVID-19 pandemic, then they may qualify for an extension to the payment plan for seven years.

Waived Original Signature Requirement

Because the entire country has been in lockdown at some point during the pandemic, some bankruptcy courts have decided to waive the requirement that a bankruptcy attorney must get a “wet signature” from his or her client on the bankruptcy petition.

This is simply the original signature from the debtor on the petition to file bankruptcy.

Debtors and their bankruptcy attorneys can review the necessary documents virtually rather than meeting in person.

This allows for the bankruptcy process to move forward without the physical contact that was previously required.

Section 341 Meeting of Creditors

Regardless of whether or not a debtor files for Chapter 7 or Chapter 13 Bankruptcy, he or she will have to attend a “meeting of creditors.”

This is where the debtor faces all of his or her creditors alongside the court-assigned trustee and discusses every relevant detail of what is owed so that everyone can have a unified, realistic expectation of what needs to be paid back.

Stimulus Money Cannot Be Counted as Income

When filing for bankruptcy, debtors have to list their income to submit to the courts.

With the stimulus checks that were given to many Americans, some people’s income drastically increased. If a debtor had to claim this as income, this could misrepresent the true financial situation of him or her.

In order to prevent this misrepresentation, the debtor is able to leave any money received from a stimulus check related to the coronavirus pandemic out of consideration when adding up income.

This list is a good start in the search for information on how the coronavirus pandemic has affected bankruptcy, but it is by no means exhaustive.

If you are an Auburn or Opelika resident who is considering filing for bankruptcy, you should consult an Auburn/Opelika bankruptcy lawyer who can explain in depth how bankruptcy law has been affected by recent COVID-19 legislation.

David S. Clark is a bankruptcy attorney who has represented numerous residents of Auburn, Opelika, and Lee County. Contact David S. Clark today for a free evaluation on your bankruptcy case!

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.

Debt Consolidation or Bankruptcy–Which Is Right for You?

By | Attorneys & Lawyers, Understanding Bankruptcy | No Comments

Bankruptcy and debt consolidation are tools for different financial situations. See which is right for you.

Financial difficulties are a fact of life for many people in Auburn and Opelika, AL.

If anything has brought this to light, the COVID-19 pandemic has. 

In 2020 the United States lost a total of 9.37 million jobs–that’s nearly 4.5 million more jobs than we lost during the 2009 financial crisis.

When financial markets crash, businesses shut their doors, and jobs are not to be found, bills still have to be paid. 

Through massive government stimulus many Auburn and Opelika residents were able to receive checks that have helped to keep the lights on in the house and food on the table for the kids, but this governmental help will not last forever.

Eventually Americans will have to pay their bills and settle their debts with lenders on their own dime.

This will inevitably put many Alabamians in financial trouble once again. They may come to the conclusion that some kind of debt rearrangement is necessary for their survival, but which is right?

Today, we will discuss the benefits of debt consolidation and bankruptcy for individuals and which might be right for you given your situation.

First we’ll describe the basics of both bankruptcy and debt consolidation in Alabama. Then, we’ll give a bit of guidance as to how each might help you depending on your circumstances.

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

Bankruptcy

Bankruptcy is a legal process by which debtors can legitimately find relief from their debts.

Though it is often characterized as a life-ending step this is not true.

American greats like Abraham Lincoln, Walt Disney, and Willie Nelson all declared bankruptcy at one point in their lives and it didn’t stop them.

Essentially bankruptcy works by an individual going to the courts willing to do what it takes to get out from under their debts. This is a tedious and time consuming process that requires giving judges, counselors, and creditors very extensive financial records like income, assets, debt amounts, and more.

Then the courts and counselors (your bankruptcy attorney) create a plan to pay off as much of the debt as possible given the individual’s assets.

Individuals seeking relief through bankruptcy will also receive much court-mandated guidance on how to avoid another incident like bankruptcy in the future.

Once the payment plans and debts are settled through the bankruptcy process the individual who filed is once again financially independent.

Depending on your income level and amount of secured and unsecured debts, you may choose to file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.

Learn more about filing Chapter 7 Bankruptcy in Auburn and Opelika, AL.

Learn more about filing Chapter 13 Bankruptcy in Auburn and Opelika, AL.

Debt Consolidation

Debt consolidation works by rolling your existing debts into a lump sum payment.

This payment is a smaller total amount than the sum of your individual debts because it is a loan with a smaller interest rate.

Debt consolidation is helpful for individuals because it gives them a more manageable payment amount each month.

The downside of debt consolidation, however, is that those who choose to consolidate their debt will have to make these smaller payments for a longer period of time. In the end, he or she will pay more than he or she would have paid if he or she had been able to make the original payments.

Which Is Right for You? It Depends on Your Situation

Debt Consolidation

Debt consolidation may be the better option if there still seems to be some light at the end of the tunnel, so to speak. If you believe that you can eventually pay off your debts, then you may want to choose debt consolidation.

Debt consolidation can give debtors a bit of “breathing room” in order to manage their monthly payments a bit better. 

However, if you are not willing to practice more conservative spending habits, then debt consolidation will just put the problem off until a later date and make you pay more than you would have with the original loans.

Bankruptcy

If you have gotten so deep into debt that you see no possible way out, then bankruptcy may be the best option for you.

Are you seeking debt consolidation or bankruptcy in Opelika or Auburn, AL? Contact David S. Clark, Attorney at Law. David has years of experience helping Auburn and Opelika residents escape financial stress through bankruptcy and debt consolidation.

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.

Photo by Bob Fitch

Fred Gray–An Alabama Attorney for Integration

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During black History Month, America reflects on the particularly important role that African-Americans have played in our history.

Alabama residents have a rich opportunity to think about the work that our fellow Alabamians have played in fighting legal segregation in our state and working toward the full civil rights of all in our state regardless of race.

Civil Rights in Alabama–A Legal Battle

Many of the most influential players in the Civil Rights Movement were attorneys. Dr. Clarence B. Jones who provided legal counsel to the Rev. Dr. Martin Luther King, Jr., Thurgood Marshall who served as the first African-American Justice from 1967 to 1991, Barbara Jordan was a Texas attorney who was the first woman to be elected to the Texas Legislature are some names that often come to mind when thinking of influential black attorneys.

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
Photo by AP Photo

Fred Gray–Alabama’s Civil Rights Attorney

Fred Gray is an Alabama-born attorney that played a massive role in ending legal segregation in our state.

When Gray opened up his Montgomery law office at the age of 23 in 1954, he was one of very few African-American Attorneys in Alabama. 

By representing Rosa Parks and Claudette Colvin when they were charged with disorderly conduct for refusing to give up their bus seats to white passengers in Montgomery, Alabama, Mr. Gray was thrust into the spotlight of history.

Although Mrs. Parks was eventually convicted of disorderly conduct and violation of a Montgomery ordinance, this case started the pivotal Montgomery Bus Boycott.

During this boycott, Gray served as a legal advisor for the Montgomery Improvement Association.

In 1956 he was the lead counsel in the Supreme Court case Browder v. Gale. This case upheld the lower court’s ruling that segregation on city buses is unconstitutional and illegal.

Gray also provided legal counsel for the National Association for the Advancement of Colored People (NAACP) while it fought to overcome an effective outlawing done by the then Alabama State Attorney General, John Patterson. After 8 years of legal struggle, the NAACP was once again allowed to operate in the state.

Mr. Gray served on Dr. Martin Luther King’s defense team when the reverend was accused of tax evasion in the State of Alabama in 1960. Gray and his team successfully argued King’s case before an all-white jury and achieved acquittal for Dr. King.

The list of Mr. Fred Gray’s legal contributions to racial equality in America are too numerous to mention in a brief post. 

However, one of the most notable achievements that Mr. Gray accomplished in his career as an Alabama attorney was his work ending segregation in Alabama schools.

In 1963, Gray represented Vivian Malone and James Hood in their efforts to attend the University of Alabama which sparked Gov. George Wallace’s infamous stand in the schoolhouse door.

He was also the plaintiff’s attorney in the case Franklyn v. Auburn  which led to the integration of Auburn University.

Gray did not stop his legal work here, eventually through lawsuits that he filed, all public colleges and universities in Alabama and more than 100 public schools were integrated.

Mr. Gray has not stopped the fight for the equal rights of all Americans. In the years since the Civil Rights Movement, he has used his position as a prominent African-American lawyer as a cause for good. 

In 1970 Gray, along with Thomas Reed, became the first African Americans to be elected to the Alabama state legislature, in 1985 he served as president of the National Bar Association, in 2002 he became the first African-American president of the Alabama Bar Association, and in 2017 he was awarded a Lifetime Service Award from HOPE International (this is a just a snapshot of his lifetime awards and accomplishments).

As an African-American lawyer, Fred Gray has served the people of Alabama with passion and commitment. We are glad to honor him as a hero of Alabama during this Black History Month.

David S. Clark is an Auburn and Opelika, AL attorney who works to help his clients, no matter their creed or color, overcome financial difficulty through bankruptcy. Contact David S. Clark today for a free consultation!

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.

Why Choose a Local Bankruptcy Attorney

By | Attorneys & Lawyers, Bankruptcy Law | No Comments

One way to lower the risk of hiring an attorney who will work for him or herself rather than to help you overcome your financial hardship is to hire a local bankruptcy attorney like David S. Clark.

During financial crisis threats of repossession and collection calls from creditors often seem to come daily. Foreclosure of your home because of the inability to pay back your loan and falling prey to the payday loan cycle can feel like rock bottom for many.

The scary decision to file for bankruptcy or restructure your debt through debt consolidation may be the best way forward for those who find themselves in such economic turmoil.

Hiring an attorney to help you navigate these muddy waters can be a lifesaver, but hiring the wrong attorney can be more harmful than helpful.

One way to lower the risk of hiring an attorney who will work for him or herself rather than to help you overcome your financial hardship is to hire a local bankruptcy attorney like David S. Clark. Here are a few reasons why:

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

It’s Easier to Know Local Bankruptcy Attorneys

Lawyers that have central offices across the nation or throughout the state are often located in distant urban centers.

This can make it difficult for them to empathize fully with their clients.

A local attorney, however, is focused on a much more focused area. They live in the same area that you do. Their children go to school with yours. You go to church with them. You see them at the park or at a restaurant downtown.

They are accessible and approachable.

This adds a level of transparency to an attorney because the people that he or she would represent are able to know him or her on a far deeper level than just how many millions of dollars have been won in settlements or how many successful bankruptcy declarations he or she has had.

Local Bankruptcy Attorneys Are Invested in Their Communities

This investment is both financial and social.

When you pay your local lawyer for the services they provide, that money is going to be used to pay bills including groceries for their family, a house payment on a loan from the local bank, tuition for their kids at the local community college or university, and charitable giving to local non-profit organizations.

This is an investment in the improvement of your community.

If you were to hire a lawyer who is part of a law firm that is centrally located in a distant city, then the money that you pay for legal representation may go to several different places. The community that you live in, however, will not likely be where this money ends up.

Local Bankruptcy Attorneys Know the Local Courts and Financial Services

The journey to financial freedom through bankruptcy is one that involves several meetings with financial counselors, standing before judges, and negotiating with creditors. 

Much of this involvement with bankruptcy happens at the local level.

A local bankruptcy attorney will be able to help you navigate these institutions better than almost anyone because they interact regularly with the same individuals in these organizations.

This interaction builds a natural bond of trust between your local lawyer and these institutions. As one who is represented by a local lawyer, that trust may then extend to you and give you more favorable conditions from which to work for financial freedom.

If you are a resident of Auburn, Opelika, or East Alabama and are looking to file Chapter 7 or Chapter 13 Bankruptcy, contact David S. Clark, a local bankruptcy attorney, 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.

What Is Chapter 7 Bankruptcy?

By | Bankruptcy Law, Understanding Bankruptcy | No Comments

If you feel lost when researching Chapter 7 Bankruptcy, this quick guide is for you.

Chapter 7 Bankruptcy is defined by bankruptcy that relieves a debtor from his or her debts through the liquidation (the exchange of valuable assets like a home, car, television, etc. for cash) of assets and subsequent distribution of these assets to creditors.

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

Who Can File Chapter 7 Bankruptcy?

Individuals, partnerships, corporations, or other business entities can qualify for Chapter 7 Bankruptcy. However, not every individual, partnership, and corporation can file for bankruptcy.

In this post, we will focus only on individuals and how Chapter 7 Bankruptcy can affect them. 

There are a few requirements and restrictions on what an individual must do in order to qualify for Chapter 7 Bankruptcy:

  • First, someone seeking relief through Chapter VII Bankruptcy must be subject to a means test.
  • Secondly, a debtor must appear before the court and comply with court orders at least 180 days before the debtor wishes to file. Failure to do so will result in the case being dismissed without relief to the debtor.
  • A person who wishes to seek relief under Chapter 7 Bankruptcy must also receive professional credit counseling from a credit counselor that is approved by the court. This must happen at least 180 days before the debtor files. Failure to do this will result in the debtor’s case being thrown out and he or she will receive no relief.

How To File Chapter 7 Bankruptcy

An individual begins the process of filing Chapter 7 Bankruptcy by submitting a petition to the local bankruptcy court (click here to view an official bankruptcy court map). In addition to this, the person seeking relief must fill out several forms disclosing the entirety of their financial situation and history. These form include:

  • Schedules of assets and liabilities.
  • Schedule of current income and expenditures.
  • Statement of financial affairs.
  • Schedule of executory contracts and unexpired leases.

The debtor will then have to pay several court and service fees for filing. This is mandatory for everyone seeking debt relief under Chapter 7 Bankruptcy unless the individual’s income is less than 150% below the poverty level as defined by Bankruptcy Code.

If the debtor is married, he or she will have to fill out this information for his or her spouse regardless of whether or not they are filing jointly.

21 – 40 days from the date of petition, the case trustee (an impartial individual who is assigned by the state or federal government to administer the case and liquidate the debtor’s nonexempt assets) will meet with the creditors of the debtor. Here the trustee will subject the debtor to an oath and then the creditors will be able to ask any questions regarding the individual’s financial matters and property.

Helpful Chapter 7 Tips

It is very important that the debtor cooperates fully throughout the bankruptcy process with the bankruptcy court and the trustee assigned to the debtor’s case. This is especially true when the trustee calls the meeting of creditors.

Though the questions that will be asked will be difficult, complicated, and can sometimes be embarrassing, the debtor must submit fully to his or her oath of honesty. This will be to the ultimate benefit of the debtor and will hopefully end in his or her financial relief.

Additionally, If the debtor then recognizes that a different chapter of bankruptcy is more applicable and beneficial to the situation, he or she may be able to convert the case to the appropriate chapter so long as it has not already been converted from another chapter.

Filing for Chapter 7 Bankruptcy can be a scary process added on top of an already tumultuous time. Hiring a bankruptcy lawyer who is competent and compassionate can help relieve your stress during the filing process and can help you get the financial relief that you need. Contact David S. Clark today and get started on the road toward financial freedom!

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.

How To Escape the Payday Loan Debt Cycle

By | Attorneys & Lawyers | No Comments

Given that Alabama has a 7% usage rate for payday loans, paying back these loans is a concern for many in our state. With the COVID-19 pandemic these loans are only expected to increase. 

Everyone has seen payday loan centers advertised on commercials with smiling people who have cash stuffed in both hands. These commercials suggest payday loan businesses are centers for getting back on your feet financially.

The reality though is a very different picture.

Payday loan use is a recurring practice for many of its victims; 80 percent of loans were taken out two weeks after a previous loan was paid.

The state of Alabama has a higher concentration of payday loan storefronts than 47 states. These payday lenders charge an average of 461 percent APR on their loans. 

Given that Alabama has a 7% usage rate for payday loans, paying back these loans is a concern for many in our state. With the COVID-19 pandemic these loans are only expected to increase. 

We want to help you understand what the payday loan debt cycle is and how you can get out of it.

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 Is the Payday Loan Debt Cycle?

The payday loan debt cycle describes the oftentimes detrimental debt process that many people in dire financial circumstances find themselves.

It frequently starts with an individual needing cash quickly. They may need this cash to pay rent, keep up with a car loan payment, or even to buy groceries for their family.

Payday loan companies will then lend the individual an amount of money (not usually exceeding $500). It is usually mandated that these loans be paid no later than 30 days after the loan is made. The harmful aspect of these loans to the debtor is that the interest on these loans is often extremely high. In fact, the interest payment on average is higher than the amount of the original loan.

After the money becomes due, many individuals find themselves in a financial bind once again. Though they have yet to pay the original loan interest payment, they seek another loan from payday lenders. These are often the only options that these individuals have to get cash because no other lenders will lend to them because of poor credit history.

Thus, a cycle of debt to payday loan companies begins.

How to Escape the Payday Loan Cycle

When solving a debt problem, the solution is often found only by getting to the root of the problem.

Why did you seek out a fast money loan? You were low on income, of course!

So, how do you remedy this?

Find some type of employment.

Though it is often difficult to find the exact job that you want, there are countless opportunities for work. You may need to work a job for which you feel overqualified  and underpaid. However, some income is better than none and any little bit will help you pay off your debt and manage paying your expenses.

Next, pay off your debts.

We suggest using the “debt snowball” method developed by Dave Ramsey.

Begin by ordering all of your payday loan debts from smallest to largest. Then, make the minimum payment on all debts except the smallest. As you begin to pay off each debt little by little you will build momentum.

If you are struggling to come out of the payday loan debt cycle and can’t see a way out, call David S. Clark. Our attorneys not only cover bankruptcies, but also assists clients with other financial matters like payday loans.

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.

What Is Chapter 13 Bankruptcy?

By | Attorneys & Lawyers, Bankruptcy Law, Understanding Bankruptcy | No Comments

In our last blog post we learned that Chapter 13 bankruptcy is known as ““Adjustment of Debts of an Individual With Regular Income.” Let’s explore a bit more what exactly that means and how it can help you regain control of your financial situation.

A Brief History of Chapter 13 Bankruptcy

In a previous article entitled, “How Bankruptcy Law Has Changed” we gave a more in depth recounting of the bankruptcy story.

Some of the facets of Chapter XIII Bankruptcy go back in the American experiment to the drafting of the Constitution (One could make a strong argument that American bankruptcy originated in English Common Law in the 16th Century).

Chapter 13 Bankruptcy, however, became a specific category of debt relief with the passage of The Chandler Act of 1938.

Since then, it has been one of the most common avenues for Americans to obtain debt relief.

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

How Does Chapter 13 Bankruptcy Work?

After deciding to file Chapter XIII, a debtor must file a petition with the bankruptcy court of the area in which he or she has a domicile (legal address) or residence.

After filing the initial petition a debtor must also file schedules of: liabilities and assets, current income and expenditures, executory contracts and unexpired leases, and a statement of financial affairs.

Debtors then have to provide the court with proof that they have received financial counseling from a court certified counselor along with a few other miscellaneous documents listed here.

Then, the debtor must give the Chapter 13 case trustee with his or her tax returns or transcripts, this must also include returns filed during the case.

The debtor will then have to pay a charge of $235 for a case filing fee and a $75 miscellaneous administrative fee. This, fortunately, can be paid through installments.

Next, the debtor must compile:

  1. A list of all creditors and the amounts and nature of their claims;
  2. The source, amount, and frequency of the debtor’s income;
  3. A list of all of the debtor’s property; and
  4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc. (Source: Chapter 13 – Bankruptcy Basics)

Then, the trustee will call a meeting with the debtor and all creditors. The debtor will be placed under oath, then be subjected to a series of questions from the trustee and creditors. During this meeting the actual disbursement plan is completed.

Following the trustee and creditor meeting, the court will hold the bankruptcy hearing.

After a confirmation of the plan by the bankruptcy court judge, the Chapter 13 plan will be implemented and it is up to the debtor to see that it is carried out to full success.

*Note that married couples can file jointly or separately.

Who Can File for Chapter 13 Bankruptcy?

Chapter XIII is fairly inclusive as to who can apply for it.

Here are the basic qualifications:

  • Debtor must have proof of regular income.
  • Unsecured debts can be no greater than $394,725.
  • Secured debts can be no greater than $1,184,200.

Benefits of Chapter 13 Bankruptcy

  • Because of the development of a legally binding debt payment plan with Chapter 13 bankruptcy, debtors are allowed to keep certain assets out of reach from creditors.
  • It allows a debtor to pay past-due payments like taxes, child-support, and alimony while protecting co-signers and allowing you to reduce debts like student-loan debt.

If you are considering filing for Chapter 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.

Questions To Ask Your Bankruptcy Lawyer

By | Attorneys & Lawyers, Bankruptcy Law, Understanding Bankruptcy | No Comments

Filing for bankruptcy is usually a journey into the unknown for many. So when beginning, you should have a few questions ready to ask your lawyer so that you can get started in the right direction.

What Type of Bankruptcy Should I File?

Not all bankruptcy is created equal. 

There are so many different forms of bankruptcy. Figuring out which specific type, or chapter, you should file for can be a daunting task.

You should ask your attorney which type of bankruptcy is right for your situation. The offices of David S. Clark deal with Chapter 7 and Chapter 13 bankruptcy cases.

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 that, if a debtor exceeds, will disqualify the debtor from being able to declare Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy is also known as “Adjustment of Debts of an Individual With Regular Income”

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 to repay creditors over a reasonable period of time.

Does Your Attorney Have a History of Success for His or Her Clients?

There are countless bankruptcies lawyers offering their services, but that does not necessarily mean that they have proven experience actually helping to get clients back on their feet.

Ask your lawyer about their case history. They should be able to provide you with a list of past clients that can reference how your lawyer worked with them.

Should I Even File for Bankruptcy?

While bankruptcy can be a helpful tool to help you get out of crippling debt, it may not be the right thing to do in your situation. 

There are several other ways to climb out of the hole of debt and your attorney should be able to give you adequate information about those.

Some of these other options include:

  • Debt Consolidation
    • This involves “rolling” all of your existing debts into one lump sum and is  helpful if you are able to refinance it at a lower interest rate and keep the rate low.
  • Foreclosure
    • This is selling an asset in order to pay back a creditor.
  • Wage Garnishments
    • This is where a person’s earnings are withheld by an order of the court to go directly to repaying debts.

The answers to these questions are not always clear. 

They are sometimes difficult to navigate. 

So having an attorney that will know in which direction to point you is crucial during a time of financial difficulty. What’s more is the importance of having an attorney who will take the time to listen to you and your situation, then inform you on what the best path forward for you is.

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.