Gulf Shores, AL Chapter 13 Bankruptcy Attorneys

If you’ve found yourself in more debt than you can manage on your own, you’re not alone. In 2023, bankruptcies increased 18% in the United States. On the back of inflation, a slow economy, and the effects of a pandemic, people are struggling more than they have in a long time. You don’t need to keep carrying this burden alone—Chapter 13 bankruptcy can help you restructure your debt and get your finances back under control.

Our team is here to help. We recognize what a significant decision bankruptcy is, and our goal is to make it as stress-free and simple as possible for you. Contact our Gulf Shores team at 251-336-3695 to set up a time to talk now.

Is Chapter 13 Right for You?

If this is your first time considering bankruptcy, you may wonder if Chapter 13 is the right choice for you. Individuals can file for Chapter 7 or Chapter 13 bankruptcy, but what’s available to you depends largely on your income, assets, and debt. Chapter 13 bankruptcy is often referred to as the “wage earner’s plan,” as it’s accessible to those who may have too high of an income for Chapter 7 bankruptcy.

The main difference between Chapter 7 and Chapter 13 is how the debt is managed. In Chapter 7 bankruptcy, your qualifying debts are discharged when the bankruptcy is granted. In Chapter 13, you create a three-to-five-year payment plan that pays your secured debt and a portion of your unsecured debt.

Chapter 13 may also be the better option for you if you have sizable assets that you’d like to keep after bankruptcy. In Chapter 7, you often have to give up valuable assets to pay off part of your debt. Chapter 13 may allow you to keep them as long as you get caught up on your late payments.

How Different Debts Are Handled in Chapter 13 Bankruptcy

Chapter 13 bankruptcy takes a slightly different approach to each type of debt. First, take a look at any priority debts you have. These must be paid off and are the most important part of your payment plan. Priority debts include back child support, back spousal support, most delinquent taxes, and legal fees.

Secured debts are also highly prioritized in Chapter 13 bankruptcy. Secured debts are any debts that are backed by collateral, such as mortgages or car loans. During your payment plan, you’ll need to make scheduled payments to stay current on those debts and catch up on any missed payments. Upon completion of your plan, you will have paid back all missed secured debt payments and remained current on payments.

Unsecured debts are not as highly prioritized in Chapter 13 bankruptcy, and the amount you pay off depends largely on how much debt you have and how much disposable income you have. Some people pay off all or most of their unsecured debt during their payment plan, while others pay only a portion or none of it. Once you finish your payment plan, your remaining unsecured debts are discharged.

Structuring Your Payment Plan

A big part of Chapter 13 bankruptcy is how you set up your payment plan. Your attorney will help you file your bankruptcy petition, which includes extensive information on your assets, sources of income, and debt. You’ll also need to attend a credit counseling course.

Your repayment plan depends largely on the debts you owe and how much disposable income you have. Disposable income is what you have left after paying rent, utilities, groceries, and other necessary expenses. Plan on spending a significant amount of your disposable income on debt payments for three to five years.

If your income is below the median in Alabama, your payment plan will be three years. If your income is above the median, your payment plan will likely be for the full five years. Your Gulf Shores bankruptcy lawyer will help you create a payment plan that makes sense for you. You can compare what you are currently paying on each of your debts to what you can realistically afford and use that as a starting point.

How the Team at Padgett & Robertson Can Help You

Moving forward with bankruptcy is a huge decision for your family. You’ve likely struggled under the weight of your growing debt for years, and this could be your way out. Many people struggle with navigating the Chapter 13 process on their own.

The process of filing for bankruptcy, creating a payment plan, going through credit counseling, and working with a trustee in the United States Bankruptcy Court can be overwhelming. You have to provide a substantial amount of documentation, meet strict deadlines, and be ready to provide additional documentation or records upon request. It is easy to get confused and miss deadlines or important documents while simultaneously juggling work, caring for children, and meeting your other obligations.

When you choose the team at Padgett & Robertson, we take care of all of that. Rather than having to figure it out on your own, you can take care of everything else on your to-do list while we support you through the bankruptcy process. We’ll tell you exactly what paperwork we need from you, what steps to take next, and what you can expect in the days and weeks to come.

Our team is always available when you have questions or concerns—we never want this process to leave you stressed out or overwhelmed. By the time your payment plan is finished, we’re confident that you’ll feel financially in control and ready to move forward into a brighter financial future.

Contact Us Today to Learn More About Bankruptcy in Gulf Shores

Are you ready to find out if Chapter 13 bankruptcy is right for you? The team at Padgett & Robertson is here to help. During your consultation, we’ll take a look at your finances, explain your options, and tell you what to expect if you move forward with each option available to you. There’s no pressure or obligation—just the information you need to make the best choice for your family. Set up a consultation now by contacting us online or calling us at 251-336-3695.