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Bankruptcy law is a federal construct in the United States and is therefore handled uniformly across the country, including in Selma. However, some aspects can be influenced by state law, such as exemptions that protect certain types of property. Bankruptcy law is designed to help individuals and businesses who cannot pay their debts by providing a means to get a fresh start financially. The two most common forms are Chapter 7 and Chapter 13 bankruptcy. In Chapter 7, debtors aim to discharge all eligible debts, while Chapter 13 involves a payment plan that lasts typically three to five years.
Though it's possible to file bankruptcy on your own, the process can be complicated and daunting. Hiring a lawyer can be beneficial for a number of reasons. A bankruptcy attorney can help you understand your options, suggest the type of bankruptcy that's best for you, complete and file necessary forms, negotiate with your creditors, and represent you at any necessary court hearings. Errors during the bankruptcy process can lead to your case being dismissed, less dischargeable debt, or loss of property, so expert advice can be crucial.
While bankruptcy law is federal law, some features are dictated by state laws, including the types and amounts of property that are protected from creditors, also known as exemptions. In Selma, like the rest of Alabama, exemptions include homestead, personal property, insurance and pensions. A lawyer can provide advice on how these exemptions apply to your specific case.
No, not all debts are discharged in bankruptcy. Some non-dischargeable debts include certain types of tax debts, child support, alimony, and student loans.
Chapter 7 allows for most or all of your debts to be discharged after your non-exempt property is used to pay off some of the debt. Chapter 13, on the other hand, involves a payment plan where you pay back some or all of your debt over a period of three to five years.
Bankruptcy will have a negative impact on your credit, and it can remain on your credit report for up to ten years. However, its impact can lessen over time, and there are steps you can take to rebuild your credit post-bankruptcy.
Whether or not you can keep your home will depend on your equity in the home, the type of bankruptcy you file, and whether your state has a homestead exemption that can protect some or all of your equity.
After receiving a discharge in Chapter 7 bankruptcy, you must wait eight years before you can file again. After receiving a discharge in Chapter 13 bankruptcy, you typically must wait two years before you can file again. However, these are only general rules and other factors may affect this timing.
For more information about bankruptcy, valuable resources include the U.S. Court's official Bankruptcy Basics guide, the Federal Trade Commission's advice on dealing with debt, and the Alabama State Bar Association, which can provide referrals to local bankruptcy attorneys in Selma.
If you're considering bankruptcy, the first step should be consulting with a bankruptcy attorney in Selma who can provide legal advice based on your specific situation. It's important to gather any necessary documents, such as proof of income, list of debts, and list of assets, before consulting with an attorney. From there, your attorney can help guide you through the bankruptcy process.
