What is Bankruptcy & How Can It Help Me Out? Bankruptcy is a legal process that allows individuals or businesses to discharge their debts or reorganize their finances in order to pay off their creditors. It is designed to give people a fresh start financially and provide a way out of overwhelming debt.
There are several types of bankruptcy that individuals and businesses can file, including Chapter 7 and Chapter 13. Each type of bankruptcy has its own eligibility requirements and can provide different benefits depending on the circumstances of the case. When you do a consultation with a bankruptcy attorney in Clanton, or anywhere else around Montgomery, Alabama, then we can help guide you through the process.
Chapter 7 bankruptcy, also known as a “liquidation” bankruptcy, allows individuals to discharge their unsecured debts, such as credit card debt and medical bills. In a Chapter 7 bankruptcy, the debtor’s assets may be sold to pay off their creditors, although certain assets may be exempt from the sale.
Chapter 13 bankruptcy, also known as a “wage earner’s” bankruptcy, allows individuals to reorganize their debts and pay them off over a period of three to five years. In a Chapter 13 bankruptcy in Montgomery, or wherever you live in Alabama, the debtor’s assets are not liquidated, but rather a repayment plan is developed to allow the debtor to pay off their debts over time.
To file for bankruptcy, an individual or business must first determine which type of bankruptcy is most appropriate for their situation. They must then gather all of their financial information, including a list of their debts and assets, and file a petition with the bankruptcy court.
Once the bankruptcy petition is filed, an automatic stay goes into effect, which means that creditors are no longer able to pursue collection efforts against the debtor. The bankruptcy court will then review the petition and, if it is approved, will issue a bankruptcy discharge, which releases the debtor from their debts. An experienced bankruptcy attorney in Prattville, or anywhere else in Alabama, can always help you through the process.
Bankruptcy can be a helpful option for individuals or businesses struggling with overwhelming debt. It allows them to discharge their debts or reorganize their finances in a way that allows them to get back on track financially. It is important to consult with a local Millbrook bankruptcy attorney to determine the best course of action for your particular situation.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, probate, and real estate closings on this website. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply feedback. We appreciate our readers & love to hear from you!