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Understanding the Steps in an Alabama Chapter 7 Bankruptcy Filing

Book that reads bankruptcy law

Filing for bankruptcy in Alabama under Chapter 7 is a decision you should take seriously. That said, when you have the help of an experienced attorney, the process doesn’t have to be scary. Read on to learn more about the bankruptcy process.

Filing a Petition

After you’ve decided to file for bankruptcy, the way to begin the bankruptcy process is by filing a petition. Before you file, you will need to complete mandatory credit counseling. We will describe this counseling in a future post. Your attorney will help you complete the petition, along with your help. You can assist your attorney in completing the petition by gathering all your financial documents, recent tax returns, and title documents for any property you own.

This will also be the time that your lawyer will determine whether exemptions will cover all your assets, or whether some of it will be non-exempt. Non-exempt assets may need to be forfeited to the bankruptcy court, but many Chapter 7 bankruptcy petitioners do not end up having any non-exempt assets.

Automatic stay and assignment of a trustee

Once your petition has been filed, an automatic stay goes into place which prevents your creditors from contacting you about existing debts, and puts any ongoing foreclosure processes on hold. You will also be assigned a bankruptcy trustee. The trustee will review your petition to ensure it is complete, and will serve as the mediator between you, the bankruptcy court, and your creditors. The trustee will also determine whether or not to sell any of your non-exempt property in order to satisfy your creditors.

Meeting of Creditors

Between a month and six weeks after filing your Chapter 7 bankruptcy petition, you will need to attend a Meeting of Creditors, alternately known as a Section 341 meeting. This meeting will take place at the bankruptcy court and will require you prove your identity and answer questions about your petition and finances. Generally, these meetings are brief and straightforward. Despite the name, creditors don’t often attend these meetings.

Discharge

Both the bankruptcy trustee and your creditors can challenge your bankruptcy petition within 60 days after it has been filed. Provided that no challenge is filed, your bankruptcy will be approved, and you will receive a letter in the mail notifying you of the discharge of your eligible debts. Depending on the circumstances of your case, this can occur in as few as 90 days from the date your petition was filed.

If you are an Alabama resident facing mounting unsecured debt, such as medical bills or credit card debt, speak with the understanding and knowledgeable Montgomery bankruptcy attorneys at the Dansby Law Firm or a consultation, at 334-834-7001.

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