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Bankruptcy and debt law in Birmingham, United States, are regulated by both federal and state law. Bankruptcies are generally handled by federal bankruptcy courts, but state laws can impact how debts are settled. It's possible for individuals and businesses facing insurmountable debt to file bankruptcy to get a fresh financial start. The most common types of bankruptcy cases are Chapter 7 (liquidation of assets to repay debts), Chapter 11 (reorganization of business debts), and Chapter 13 (debt repayment with income).
Bankruptcy and debt laws are complex, and understanding them requires specialized knowledge. You may need a lawyer in situations like filing a bankruptcy case, dealing with creditors' lawsuits, preventing foreclosure and wage garnishments, and understanding the tax implications of bankruptcy. Additionally, legal counsel may be necessary to ensure your rights are protected throughout the bankruptcy process.
The majority of bankruptcy laws are federal, but some state-specific laws in Alabama can impact the process. For example, Alabama has specific laws about what property is exempt or protected during bankruptcy. Alabama's exemptions allow individuals to protect certain property like a homestead, personal property, wages, pensions, public benefits, and insurance benefits from creditors. The means test, based on state median income, determines eligibility for Chapter 7 bankruptcy.
No, not all debts can be discharged in bankruptcy. While many debts like credit card debt, medical bills, and personal loans can be discharged, others like most student loans, child support, alimony, and certain tax debts cannot.
Bankruptcy can offer a fresh start, but it also has significant consequences, including a severe impact on your credit score. A bankruptcy can stay on your credit report for 7-10 years depending on the chapter filed.
There are time limits between bankruptcy filings. After a Chapter 7 bankruptcy discharge, you must wait eight years before re-filing under Chapter 7, or four years to file under Chapter 13.
Not necessarily. Depending on your situation, you might have to surrender certain non-exempt properties in a Chapter 7 bankruptcy. However, in a Chapter 13 bankruptcy, you can generally keep your assets.
Only some tax debts can be discharged. Generally, federal income tax debts can be discharged if they meet certain criteria, such as being at least three years old.
Bankruptcy laws can be complex, so it's important to have all the information you need. Resources like the U.S. Bankruptcy Court for the Northern District of Alabama and Alabama Legal Help offer legal information and resources related to bankruptcy.
If you're considering bankruptcy, it's important to consult with a skilled bankruptcy attorney to understand all your options. They can review your financial situation, clarify the local and federal bankruptcy laws, help you file a bankruptcy petition, represent you in court proceedings, and guide you through every step of the bankruptcy process.
