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Are you considering filing bankruptcy?   

When considering bankruptcy, it is important to examine all of your financial options. Most personal bankruptcy cases fall under Chapter 7 bankruptcy or Chapter 13 bankruptcy. Also known as liquidation bankruptcy, Chapter 7 bankruptcy involves selling most of your assets to pay off debts.

If you’re an Auburn or Opelika resident wondering if Chapter 7 is right for you, here are a couple of essential questions you need to ask yourself.

Can I avoid bankruptcy?

Simply put, bankruptcy is when someone cannot pay their outstanding debts with the resources they currently possess. You may find yourself in this situation due to unemployment, incurring a significant amount of medical debt, or many other reasons. Just because you are in one of these situations does not always mean bankruptcy is your only option. It is best to speak with a bankruptcy lawyer to ensure that filing for bankruptcy is the best solution for you. Read more here.

When you are uncertain about what next step to take, there are experienced and knowledgeable bankruptcy attorneys like David S. Clark in the Auburn and Opelika area that can help you sort through all of your options and determine your best next step.


What kind of debt is discharged in Chapter 7 Bankruptcy?

Not all forms of debt are created equal, and not all debts can be discharged through Chapter 7 bankruptcy. Before deciding if Chapter 7 bankruptcy is right for you, consider what kind of debt you are looking to discharge.

Some common forms of debt that are dischargeable through Chapter 7 bankruptcy include: 

  • Credit card balances (including overdue and late fees)
  • Medical bills
  • Personal and payday loans 
  • Mortgage or automobile loans for which you are unable to pay
  • Utility bills
  • Social Security overpayments
  • Veterans’ assistance loans and overpayments

Some common forms of debt that are non-dischargeable include:

  • Child support
  • Alimony
  • Student loans
  • HOA fees
  • Secured debts


What could I be giving up?

Giving up physical assets to help balance debt is required in most cases. Items that can be taken by the state to help balance your debt are known as nonexempt assets. Exempted assets are those that cannot be taken by the state to balance your debt. Learn more here.

Bankruptcy laws generally exempt assets that are deemed as necessities to life, such as:

  • Your car (depending value)
  • Your home (depending on its value)
  • Clothing 

Some typically nonexempt items may include:

  • Property that is not your primary home
  • A newer model vehicle with equity
  • Investments
  • Valuable artworks
  • Jewelry


What does the Chapter 7 Bankruptcy timeline look like?

After being filed, a Chapter 7 bankruptcy case in the Auburn and Opelika area can typically be resolved in about 4 months when conducted by an experienced personal bankruptcy attorney such as David S. Clark. Filing for Chapter 7 bankruptcy can give you a financial reset, telling creditors to take a step back and giving you some breathing room to figure out your next steps without the added stress of having to deal with them.

Once you have successfully discharged your debts, you can begin to rebuild your credit through financially responsible practices such as paying bills on time, keeping a low credit card balance, and limiting applications for new credit. 


Who can help me navigate Chapter 7 Bankruptcy?

Although the process of filing for bankruptcy and the process to financial recovery can be stressful and difficult, there are personal bankruptcy attorneys like David S. Clark who are more than willing to walk with you through this process. You do not have to go into this battle alone. Having an attorney present during the process of filing for bankruptcy takes some of the load off your shoulders and guarantees you are taking all of the correct steps. 

If you’re an Opelika or Auburn, Alabama resident struggling with the weight of overwhelming debt and seeking the financial advice, wisdom, and encouragement of an experienced bankruptcy attorney, contact David S. Clark! You can get started by requesting a 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.