Chapter 7 bankruptcy can be complicated, but it doesn’t have to be.
Despite similarities in occupations throughout Auburn and Opelika, every resident’s financial situation differs. Ultimately, no matter how stable your income is, debts can quickly become unmanageable for anyone, leading to financial distress and even the loss of valuable assets, like your home.
Thankfully, when debt does become unmanageable there is a fresh start available. Here is an explanation of Chapter 7 bankruptcy and how the process works from David S. Clark, an experienced Chapter 7 and Chapter 13 bankruptcy attorney 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.
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Understanding Chapter 7 Bankruptcy
Perhaps the most common type of bankruptcy, known as “liquidation bankruptcy” or Chapter 7, allows you to regain control of your finances by having most of your unsecured debt, including credit card debt, medical bills, and personal loans discharged by a bankruptcy court.
Yet, before describing how Chapter 7 bankruptcy works, it is essential to know exactly what kinds of debt could be discharged.
Dischargeable debts under Chapter 7 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
Non-dischargeable Debts Include:
- Non-dischargeable debts under Chapter 7 include:
- Child support
- Student loans
- HOA fees
- Secured debts
The Process of Chapter 7 Bankruptcy
Three main steps occur once you file for Chapter 7 bankruptcy in Alabama. These consist of the following:
Forms and Counseling
Before a bankruptcy court looks at each unique case, there are a number of necessary forms an Opelika or Auburn resident must fill out. These require in-depth knowledge of your personal information, including finances, creditors, assets, income, expenses, and more.
After filing, the court places an automatic stay on your case, preventing any and all creditors from collecting debts.
After filing for bankruptcy, Auburn or Opelika’s bankruptcy court will appoint an unbiased trustee to oversee your entire Chapter 7 bankruptcy process. Beyond choosing what assets to liquidate to pay off creditors, the trustee will also schedule meetings with creditors, where plans for debt repayment are put in place.
Debt Repayment & Discharge
After meeting with creditors and the bankruptcy court, certain non-dischargeable debts are paid with assets decided by the bankruptcy trustee, while any dischargeable debts are immediately discharged.
After debts are discharged with Chapter 7 bankruptcy (approximately two months after), creditors may still attempt to recover previous debts, even though they have no right to. So, throughout your Chapter 7 bankruptcy process, make sure to retain any and all necessary documents.
David S. Clark – Your Local Chapter 7 Bankruptcy Attorney
David S. Clark is an experienced Auburn and Opelika Bankruptcy Attorney who understands the intricacies, complications, and stress of bankruptcy. If you need help navigating Chapter 7 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.