Chapter 13 Bankruptcy

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!

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!

There are a lot of myths surrounding bankruptcy that can cause unnecessary hardship and stress. 

There are a lot of misconceptions that Auburn and Opelika residents have about the bankruptcy process, including how filing bankruptcy will affect them moving forward. Friends, family, and colleagues are all going to weigh in; however, it is always better to trust the opinions and advice of trained professionals like David S. Clark, an experienced bankruptcy attorney in Opelika, Alabama. 

Myth 1: Filing For Bankruptcy Means I Will Lose Everything 

Today’s bankruptcy laws offer every debtor many “exemptions” so that any Alabama resident may protect as much of their property as possible. While Chapter 7 bankruptcy is referred to as “liquidation,” it is much less common for one’s assets to be at risk. 

Generous exemptions exist and can limit risk related to your residence, vehicle, some cash, retirement accounts, and most household goods. Ultimately, most property that is considered necessary for life will be exempt from Chapter 7 bankruptcy.  

Myth 2: Everyone Will Know I’m a Failure

Bankruptcy is often due to circumstances beyond an individual’s control, such as divorce, job loss, and major illness. Bankruptcy is rarely the result of irresponsible financial behavior. Rather, filing for bankruptcy relief shows an understanding of one’s financial issues and a willingness to address them.

It is true, however, that bankruptcy is a matter of public record. There may be some reporting regarding your bankruptcy filing but most people will not be privy to this information unless they are specifically looking for it. As long as you are careful who you share this information with, you should not have to worry about everyone knowing about your bankruptcy and financial status.

Myth 3: I Will Never Get Another Line Of Credit

While debtors who have filed for bankruptcy typically find higher interest rates from credit lenders, the focus should be more on keeping new credit cards paid off and rebuilding your credit score organically.

While you will see a decrease in your credit score following your decision to file for bankruptcy, it doesn’t mean you will never have credit again–it’s called a fresh start for a reason. David S. Clark not only understands the overwhelming stress bankruptcy can bring but offers professional financial advice on how to recover. 

Myth 4: Filing For Bankruptcy Is Too Difficult

While it is technically possible to file for bankruptcy on your own, it is extremely difficult. Filing for bankruptcy requires time, money, paperwork, and expertise that is necessary in order to ensure the financial peace Auburn or Opelika residents seek. 

In contrast, David S. Clark is an experienced bankruptcy attorney that can do all of the work for you while offering legal aid throughout the bankruptcy filing process. 

Filing for Chapter 7 or Chapter 13 bankruptcy can seem like a daunting task, but it doesn’t have to be. David S. Clark is a bankruptcy attorney in Auburn, Alabama that can help you get the financial relief you need. Contact David S. Clark today to start your journey towards financial freedom!