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Bankruptcy has an image problem.
For a long time, the word “bankruptcy” has meant one thing to people: defeat. You got in the ring, your opponent was stronger, and you’re tapping out. Fortunately, nothing could be further from the truth. Filing for bankruptcy is more like hiring an enormous bodyguard. They don’t work for free, but the protection (and the peace of mind) they give FAR outweighs the cost. Here at CLG, we’ve helped hundreds of families and individuals get back in control of their finances, and we can help you too. Call us, we can go over your circumstances, and develop the best plan for you.
Chapter 7 vs. Chapter 13
For most individuals filing for bankruptcy, there are two options: Chapter 7 and Chapter 13. Fundamentally, the difference between the two comes down to an inability to repay one’s debts (Chap. 7) versus difficulties paying those debts (Chap. 13). One of the most important things they have in common is the “Automatic Stay” (this is like the bodyguard we mentioned earlier). Once your Bankruptcy is filed with the court, the Automatic Stay goes into effect and prevents creditors from contacting you because they are penalized for violating those terms. It also prevents lawsuits from being filed against the debtor, stops wage garnishments, prevents vehicle repossession, and puts foreclosure proceedings on hold. It’s the court’s’ way of saying (to the debtors), “We’ll make sure this gets handled amicably, but from now on you’ll talk to us, and we’ll negotiate with the creditor on your behalf.” There are circumstances where creditors are temporarily excused from the Automatic Stay in order to communicate with you directly, but the courts and your attorneys will be involved in those conversations.
Chapter 7 Bankruptcy
For those who qualify, Chapter 7 bankruptcy wipes the slate clean. Certain debts are generally not subject to bankruptcy discharge such as student loans, taxes, child support, and/or alimony obligations will stay in place, but all other debts are forgiven, and you’ll be able to move forward without the burden of debts you cannot pay. As you work through the process, the team at CLG will be there to support you in any way possible. In most cases, someone who files a Chapter 7 may keep their car, house, savings, and retirement accounts. From start to finish, the process of filing for Chapter 7 will take about four months, during which time you will make no payments to the court, and at the end, you are relieved of your obligations to your creditors. For those who do not qualify for Chapter 7 (your attorney will help walk you through the criteria), filing for Chapter 13 may be the right path for you to take.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is often referred to as the “wage-earner plan or debt consolidation bankruptcy” because it is intended for use by individuals who are gainfully employed or have a steady stream of income but need help structuring a plan to repay their debts more effectively. The benefit to you is that because the bankruptcy courts are involved in creating a plan, your creditors are forced to abide by its terms. During the time you’re in that payment plan (typically 3-5 years), all of your monthly debt payments will go to a bankruptcy trustee, and they will redistribute those payments to your creditors accordingly. Similar to Chapter 7, most people who file for Chapter 13 keep their car, home, and savings/retirement accounts.
Bankruptcy protections are powerful tools, created to keep you and your family on your feet, in your home, and living your life. The team of attorneys at Carmichael Law Group understands what you’re going through, and we know how to help. Give our Bankruptcy Attorney (Dothan, AL) a call to set up a free, no-obligation consultation. Take the initiative and don’t delay another day. Our office can give you the resolutions and peace of mind you need and deserve. You don’t have anything to lose and a whole lot to gain.