Gulf Shores, AL Chapter 7 Bankruptcy Attorneys

People don’t take on debt assuming they’ll never be able to repay it. If you’re like the vast majority of people who file bankruptcy in Gulf Shores, things got out of control before you even realized it. One credit card turned into two, then three, then four, then suddenly you had zero credit available on any of them. Or you suffered a medical emergency and were buried by tens of thousands of dollars in medical bills that you had absolutely no way to pay. Considering bankruptcy when you’re in over your head isn’t shameful or embarrassing—it’s smart. This process exists specifically to give relief to consumers like you.

If you think Chapter 7 bankruptcy may be the right choice for you, let’s talk about your legal options now. Call Padgett & Robertson at 251-336-3695 to set up a consultation with our team now.

The Chapter 7 Bankruptcy Process

Looking into the Chapter 7 process can help you decide whether or not this is the right step for you. Chapter 7 essentially liquidates your assets, uses them to pay off debts, and then discharges the rest of your debt. It’s a much shorter process than Chapter 13 bankruptcy and is better suited for those who simply do not have the means to pay. The process includes:

• Gather the necessary paperwork and meet with a bankruptcy lawyer. A lawyer will want an in-depth look at your finances to determine whether or not you qualify for Chapter 7 bankruptcy. You must meet certain income or disposable income requirements to qualify. Your attorney will look at your finances and tell you if Chapter 7 is an option for you.

• File the necessary paperwork and notify your creditors. If you decide to move forward with bankruptcy, you’ll file the necessary paperwork with the court and notify your creditors that you are filing bankruptcy. This means they must stop all collection efforts and direct all communication to your attorney.

• Take a credit counseling course. This is a basic requirement that aims to set you up for financial success after bankruptcy.

• Submit all required financial documents. Plan on submitting bank statements, credit card bills, tax returns, pay stubs, and more to meet the requirements of the court. It may seem like a lot, but they are just ensuring that you truly qualify for bankruptcy.

• Attend the meeting of creditors. The final major step in this process is attending the 341 meeting. Although it’s called the meeting of creditors, creditors rarely attend. You’ll be asked a short series of questions, and at that point, your debt will likely be discharged.

• Take another debt education course. You have to take a second debt education course in preparation for your fresh start.

• Finish the process. Once the court grants your bankruptcy, you can breathe easy. You can turn the page and start over.

Dischargeable and Non-Dischargeable Debts

Most debts are dischargeable in bankruptcy, but not all are. It’s important to check into this, because if the majority of your debt comes from non-dischargeable sources, this may not be the best option for you. Dischargeable debts include credit cards, personal loans, medical bills, car loans, and mortgages. Non-dischargeable debts include child support, alimony, criminal restitution, money owed to government agencies, and many types of tax debt.

Note that even though car loans, mortgages, and other types of secured debt can be discharged, that doesn’t mean the debt just disappears. If you stop paying, the bank can seize the collateral—the car or house—to make up for it.

Will You Have to Sell Your Assets?

You may have noticed that we said Chapter 7 liquidates your assets to pay for your debts. However, the court isn’t going to take everything you own and leave you with nothing as you start over—that would be setting you up for failure. There are several categories of exempt assets, and those assets cannot be taken from you during bankruptcy. In Alabama, the homestead exemption protects some of the equity you have in your home. You can also keep many types of personal property, most of your your wages and income, the earned income tax credit, and your retirement accounts. There are many other types of exemptions, including a wildcard exemption you can use to protect property not included in other categories. Most debtors end up not liquidating anything.

Issues That May Arise in Chapter 7 Bankruptcy

Issues may arise in bankruptcy, which is why it’s so important to be honest with your Gulf Shores bankruptcy lawyer at every step along the way. Your bankruptcy may be denied if you:

• Sold or gave away assets before filing

• Ran up your credit cards shortly before filing, indicating that you took on debt you knew you wouldn’t pay back

• Hid income sources or assets

• Failed to produce necessary documents, such as tax returns or paystubs

• Did not take the necessary education course

• Intentionally defrauded creditors

Additionally, any debt that you do not disclose during this process may not be discharged in bankruptcy. It is absolutely essential that you double- and triple-check your documents to ensure that you are being honest and disclosing everything.

How Padgett & Robertson Can Help You

At Padgett & Robertson, we have helped many Gulf Shores residents just like you get a fresh start. We understand how debt can consume your life, putting you under enormous stress. If you think Chapter 7 bankruptcy is the right choice for you, we’re here to talk. We’ll help you look over your finances, explain your options, and support you as you think about your next move. We’re on your side every step of the way, and you’ll be able to reach us any time you’re overwhelmed or uncertain.

Choose Us for Your Gulf Shores Bankruptcy Needs

If you’re ready to move forward with bankruptcy, let’s schedule a time to talk. Our team of bankruptcy attorneys has handled cases throughout the region, and we have the answers you’re looking for. Call us at 251-336-3695 or contact us online to get started.