BIRMINGHAM BANKRUPTCY ATTORNEYS

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BIRMINGHAM BANKRUPTCY LAWYER

www.BhamBK.com 205-582-7007

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550+ FEDERAL BANKRUPTCY CASES FILED

FILING CHAPTER 7 BANKRUPTCY IN BIRMINGHAM AL

WHAT IS CHAPTER 7 BANKRUPTCY?

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 7 is designed as an orderly, court-supervised procedure by which a trustee collects the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property without infringing on the rights of secured creditors.  Because there is usually little or no nonexempt property when filing bankruptcy under chapter 7, there may not be an actual asset liquidation of the debtor’s assets. These cases are called “no-asset cases.” Usually a debtor with assets that they wish to keep and that are not covered by exemptions can file a chapter 13 bankruptcy.

CHAPTER 7 ELIGIBILITY

A chapter 7 bankruptcy is a straight discharge, where any non-exempt assets are liquidated and unsecured debts are discharged.  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. If you qualify, our team will assist you in the process, representing you during the filing and in court.    


 
CHAPTER 7 MEANS TEST
The chapter 7 means test is a way to determine if higher-income debtors qualify for a chapter 7 case.  If your income is over the median that automatically qualifies you for ch. 7, the means test will be used to see if you can avoid a ch. 13 BK.  Essentially, this test is to determine if there is enough disposable income left over at the end of the month to support a repayment plan through chapter 13, or if there is not enough to pay off a portion of your unsecured debts.  The expenses allowed in the means test may not exactly match your actual expenditures, as there is a guideline that has few exceptions.  This form can be complicated to complete and it is in your best interest to  speak with a bankruptcy attorney to understand what your best options are and how to file in Alabama.  


CHAPTER 7 DISCHARGE

A creditor holding an unsecured claim in a chapter 7 bankruptcy will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court.  In most chapter 7 bankruptcy cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts. The debtor normally receives a discharge three to four months after the petition is filed.  Melissa Cain will work hard to ensure that filing is as painless as possible, and you get your fresh start as fast as the courts allow.

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