Bankruptcy in Alabama
Alabama has weathered many storms in recent years. The BP oil spill, two years of tornados, economic downturn, and the housing crisis have wreaked financial havoc on the good people of Alabama. Some residents lost their homes and all of their possessions, only to have it happen again one year later. If you need bankruptcy protection, you are not alone. It's been tough and you deserve help. Situations like these are exactly why bankruptcy laws were written.
This article will help you take that next step by presenting the basics opportunities bankruptcy offers and showing you how to find and work with a qualified bankruptcy lawyer.
How Alabama Bankruptcy Law Differs from the Laws of Other States
In Alabama, there are state provided exemptions that allow you to keep your property throughout the bankruptcy process. Some states allow filers to choose between their own exemptions and federal bankruptcy exemptions. This is not the case in Alabama.
- Your home equity can be protected up to $5,000 ($10,000 for married persons, filing jointly).
- Your personal possessions, valued up to $3,000, are protected ($6,000 for married persons, filing jointly).
- Pension plans and retirement accounts are protected.
While these are the main exemptions, there are additional exemptions as well and your bankruptcy attorney will let you know how you can best protect your property.
Your Choices in Filing Bankruptcy in Alabama: Chapter 7 or Chapter 13
The bankruptcy median income for an individual in Alabama is $38,231. If you make less than this, you can file under Chapter 7 bankruptcy and have many unsecured debts eliminated. The bankruptcy median income increases depending upon your family size, and a family of four can earn up to $61,593 and still file Chapter 7.
A Chapter 7 bankruptcy is usually completed within 6 months; whereas, a Chapter 13 takes 3 to 5 years to reach completion. Why? Because there are debts that are renegotiated, reorganized, and repaid in Chapter 13, it takes awhile to pay off your debts, even those with much more favorable terms.
How to Find and Select a Bankruptcy Attorney
Investigate lawyers who are licensed in Alabama and focus their practice on bankruptcy law and helping people like you. If a friend, relative, or professional advisor has personal experience with an attorney, a referral is the best way to narrow down your selection.
Otherwise, you can enter "Find an Alabama Bankruptcy Attorney" in Google or your favorite search engine. If it would increase your comfort level, take advantage of a few of the free consultation offers and select the attorney who feel an affinity with.
How to Prepare to Work with a Bankruptcy Attorney
No one likes paperwork, even your bankruptcy lawyer, and wait until you see all the paperwork he or she deals with. It's a lot and you'll be glad that you don't have to do it. However, you do have to provide all your financial information to your attorney so the appropriate papers can be filed.
Know that with each moment you work on collecting documentation of your financial situation, including bills, income statements, tax returns, contracts, debts, and assets, you'll be saving money and putting an end to creditor harassment. Alabama is a beautiful state, filled with good people. It will get better.