Birmingham Chapter 7 Bankruptcy FAQ
Clients often ask Attorney S. Scott Allums the following questions about Chapter 7 bankruptcy:
- How does a Birmingham Chapter 7 bankruptcy benefit you?
- What are the Chapter 7 eligibility requirements?
- How does Chapter 7 bankruptcy in Birmingham work?
- Do I lose all my property?
- How long does a Chapter 7 bankruptcy usually take?
Get assistance with Chapter 7 bankruptcy in Birmingham
Contact S. Scott Allums, P.C. online or call 877-770-6288 to find out whether Chapter 7 bankruptcy is right for you.
How does a Birmingham Chapter 7 bankruptcy benefit you?
Chapter 7 allows you to discharge most types of unsecured debt, such as credit cards, medical bills, personal loans, utility bills, and deficiencies on a repossessed vehicle. If you have very little equity in your house or car, you can usually reaffirm the debt and keep your property. You also can keep most of your personal belongings and household goods. You are able to leave your debt behind you quickly in a matter of months, as compared to a Chapter 13 which takes years to discharge.
What are the Chapter 7 eligibility requirements?
These are the eligibility requirements for a Chapter 7 bankruptcy:
- You must meet the means test qualifications—either your income is lower than the median Alabama income, or if higher, your calculated income does not leave enough disposable income (income after basic living expenses are subtracted) to pay unsecured debts.
- You must complete credit counseling from an approved credit counseling agency.
- You have no prior chapter 7 bankruptcy filings in the last 8 years.
- You are an individual, partnership, corporation, or business entity.
How does Chapter 7 bankruptcy in Birmingham work?
Your bankruptcy lawyer submits your bankruptcy petition, all necessary documentation, and your filing fee (unless waived) with the U.S. Bankruptcy Court for the Northern District of Alabama. You must complete the credit counseling requirement before filing and file the required counseling documentation. Once all filing requirements have been met, the court automatically stays all creditor actions.
The trustee holds a creditors meeting between 20 and 40 days after the petition is filed. You appear with your lawyer and answer financial questions that the trustee and creditors ask. Some creditors may retain the right to seize secured property. The trustee holds an auction and sells your remaining non-exempt assets to pay debts to creditors. You must complete the financial course required. The trustee ensures all requirements are met and then most of your debts are discharged.
Do I lose all my property?
No, only non-exempt property is liquidated in a Chapter 7 bankruptcy.
How long does a Chapter 7 bankruptcy usually take?
When you file for Chapter 7 bankruptcy in Birmingham, the average time to complete your bankruptcy is about four months.
