BIRMINGHAM BANKRUPTCY ATTORNEYS

We Stop Foreclosure, Garnishment & Repossession

BIRMINGHAM BANKRUPTCY LAWYER

www.BhamBK.com 205-582-7007

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550+ FEDERAL BANKRUPTCY CASES FILED

CHAPTER 7 ELIGIBILITY

A chapter 7 bankruptcy is a straight discharge, where any non-exempt assets are liquidated and unsecured debts are discharged.  This type of bankruptcy may be a good fit if you're trying to eliminate unsecured debts like medical bills or credit card debt, and you don't have a valuable asset such as a paid-off house.  A chapter 7 bankruptcy case is typically based off of your household size and annual income (calculated from the last 6 months of pay).  If your income does not fall within this parameter, you will have to complete a means test to see if you qualify for chapter 7 bankruptcy.  Otherwise, a chapter 13 bankruptcy may be in your best interest.


 

BENEFITS OF FILING A CHAPTER 13 BANKRUPTCY
‚ÄčGenerally, chapter 13 BK is preferred by debtors who have a valuable asset, such as a home or car that is not completely covered by exemptions and that they wish to keep. Your attorney will structure your case so that you are able to keep the property in question while catching up on past due amounts & continuing regular payments, as long as you can reasonably afford to do so, and the trustee agrees. Since the chapter 13 debtors court plan will require regular monthly or bi-weekly payments, chapter 13 BK is usually only appropriate for a debtor who has a regular source of income. 


Another benefit of filing under chapter 13 is that the discharge is considerably broader (i.e., more debts are eliminated) than the discharge under chapter 7 bankruptcy.  

THE DISCHARGE - CHAPTER 7 VS CHAPTER 13
In most chapter 7 bankruptcy cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts roughly 3 to four months after the petition is filed.  


However, the chapter 13 debtor does not receive an immediate discharge of debts.  The debtor must complete the payments required under the plan filed in bankruptcy court before the chapter 13 discharge is received.  The chapter 13 payment plans generally run from 3 to five years.  After that, the remaining debt is usually forgiven by the court and a discharge is awarded. 



Contact our office now to schedule a free bankruptcy consultation at 205-582-7007.  Also, if you are interested in finding out whether you qualify for chapter 13 bankruptcy or should most likely file BK under a chapter 7, we will be happy to let you know.  Just 
click here to find out more.


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Basically, Filing Chapter 7 Bankruptcy, or "straight bankruptcy," means that all of your debt gets completely wiped out, except for some types of tax debt, secured debts, restitution, gambling debts, and a few others. 


Filing Chapter 13, sometimes referred to as "Debtor's Court," means that you will pay back at least a portion of your debt using a Court approved payment plan.  It lasts approximately three to 5 years, during which time your attorney will represent you.  


Filing chapter 13 is usually much cheaper up-front when compared to a chapter 7, simply because the attorney fee and court costs are wrapped into the monthly plan payments.  

Chapter 7 vs Chapter 13 bankruptcy