Debtors Court:
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Sometimes, bankruptcy is set off by one unfortunate or tragic event; some consumers simply cannot curb overspending. Filing bankruptcy solves only part of the problem, and there is an urgent need for the continuing assistance of a knowledgeable attorney who can provide solutions to financial problems.
Information about Chapter 13 Bankruptcy
At Brent W. Davis & Associates, LLC in Birmingham, Alabama, we recognize the misconceptions that continue to exist regarding Chapter 13 bankruptcy. Alabama state legislature has changed some minor parts of the existing bankruptcy law, which causes many clients to have questions and concerns.
We represent clients who are in need of debt relief through Chapter 7 or Chapter 13 bankruptcies, and communicate to them the minimal impact of the new laws. Listed below are various bankruptcy resources for your review. They will help you get beyond the misconceptions and straight to the facts related to bankruptcy.
Chapter 13 – An Overview
The bills are stacking up, demanding calls and letters are arriving with increasing frequency, and despite your best efforts, the overdue debts just cannot be paid. In such cases, filing bankruptcy under Chapter 13 of the Bankruptcy Code may provide a solution to what seems like an insurmountable problem. Once considered a last resort, bankruptcy has evolved into an accepted method of resolving devastating financial problems. If you are facing serious financial challenges, it is important to seek the counsel of an experienced bankruptcy attorney to determine whether filing under Chapter 13 is right for you.
Bankruptcy law provides two basic forms of relief: (1) liquidation and (2) rehabilitation or reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A reorganization or rehabilitation bankruptcy under Chapter 11 or 13 of the Bankruptcy Code is, however, the option often preferred by the courts. Under Chapters 11 and 13, creditors may be provided with a better opportunity to recoup what they are owed.
Alternatives to Filing Bankruptcy
Debtors who have faced obstacles to paying off their debts when due have no doubt received more than their fair share of demanding letters and phone calls. Therefore, the thought of filing bankruptcy and getting rid of their debts, and thus the constant demands, can be quite appealing. However, this route can have long-term effects on credit rating and the ability to make large purchases, so debtors may wish to consider other, less drastic alternatives before making a decision. Talking to an experienced bankruptcy attorney can help make sense out of the many complex and confusing choices that must be made at an already stressful time.
Debts that Remain After a Chapter 13 Discharge
A Chapter 13 discharge affects only those debts provided for by the plan. Any debts not provided for in the plan will remain and need to be paid in full, even after discharge. Additional exceptions to a Chapter 13 discharge generally include claims for spousal and child support; educational loans; drunk driving liabilities; criminal fines and restitution obligations; and certain long-term obligations, such as home mortgages, that extend beyond the term of the plan. A lawyer experienced in bankruptcy law can explain which debts are “erased” as a result of a Chapter 13 discharge, and which will remain the obligation of the debtor.
Effects of a Salary Increase on a Wage-Earner Plan Under Chapter 13
When a Chapter 13 debtor enters into a wage-earner plan, he or she commits the next three years’ disposable income – that portion of income not required to meet the necessary needs of the debtor and his or her dependents – to the repayment of debt. Often, a debtor’s income will increase after the plan is in place, leading to the question of what becomes of this increase in income. Bankruptcy lawyers can answer these and other Chapter 13 questions as they arise, providing information, reassurance, and competent advocacy throughout the bankruptcy process.
Rebuilding Your Credit After Bankruptcy
Bankruptcy has a long-lasting impact on a person’s credit rating, and on his or her ability to obtain credit in the future. The impact is not entirely negative, however, and in some cases, filing bankruptcy may actually improve a bad credit rating. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy. An experienced bankruptcy attorney can offer valuable advice about how credit can be improved after filing for Chapter 13 bankruptcy. Alabama debt laws do not have to prevent you from working for a better financial future.
Chapter 13 Resource Links
United States Bankruptcy Courts
The official Web site of the United States Bankruptcy Courts includes a variety of useful information about bankruptcy.
Bankruptcy Glossary
This Web site includes a glossary on bankruptcy terminology that explains, in layman’s terms, many of the legal terms that are used in cases filed under the Bankruptcy Code.
Bankruptcy Fees
This Web page, maintained by the Administrative Office of the US Courts on behalf of the US Courts, contains the fees associated with a bankruptcy filing under a particular chapter.
Bankruptcy Forms
This Web site, maintained by the United States Bankruptcy Courts, includes Official Bankruptcy Forms, Procedural Forms and the Bankruptcy Forms Manual. All forms and instructions are available in PDF format.
Chapter 13 Basics
This Web page provides general information about individual debt adjustment under Chapter 13 of the Bankruptcy Code.