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What will I lose if I file for bankruptcy in Margaret, Alabama?

Losing debt is the ultimate goal of filing for bankruptcy in Alabama, though a person might lose property and other assets depending on the type of bankruptcy they file for. In this article, we’ll explore the benefits of bankruptcy and what a person might potentially lose if they successfully file.

 

Most people file for bankruptcy to eliminate debt

 

Debt is often the number one factor that leads people and businesses to file for bankruptcy. In 2020, roughly 522,808 personal bankruptcy cases were filed, according to Statista. When a person or business files for bankruptcy, three things can happen to their debt:

  1. The debt is discharged and the debtor is no longer liable for paying it back.
  2. The debt cannot be discharged and must be paid back. Certain debts such as child support and taxes cannot be discharged through bankruptcy but instead, must be satisfied.
  3. A repayment plan is created to pay back some or all of the debt owed.

 

If a person were to file for Chapter 7 bankruptcy, there is a chance most of their debt could be discharged. Chapter 7 bankruptcy works like this: the trustee who is assigned to the case sells a person’s nonexempt assets in order to resolve outstanding debts. Any debt that is left over and qualifies for discharge is then “erased.”

If a person were to file for Chapter 11 bankruptcy, instead of their debt being discharged, a repayment plan would be created to help them pay back their creditors. Corporations and sole proprietorships generally file for Chapter 11 bankruptcy, though an individual is permitted to file.

 

Aside from debt, what else will I lose if I file for bankruptcy in Alabama?

 

When a person files for Chapter 7 or 13 bankruptcy, they eliminate their debt, though it is done differently. In addition to losing debt, individuals or businesses might lose assets when they file for bankruptcy.

For instance, if a person filed for Chapter 7 bankruptcy, certain assets, including cash, are subject to liquidation. While the court may allow a person to maintain possession of their home and vehicle, it will only allow them to keep a certain amount of cash. Therefore, Chapter 7 bankruptcy might cause a person to lose valuable assets in addition to their debt.

When it comes to Chapter 11 bankruptcy, which is often used by businesses to reorganize, less assets are put at risk of liquidation.

 

Considering filing for bankruptcy?

 

A bankruptcy lawyer in Margaret, Alabama is someone who can help you decide if filing for bankruptcy is the best option to get your debt under control. An attorney who specializes in bankruptcy law can help you weigh the pros and understand how the process works.

If you would like to discuss your bankruptcy-related questions or concerns with a Margaret bankruptcy attorney, contact Hill, Gossett, Kemp & Hufford, P.C.

 

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

 

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

 

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

 

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

 

Springville Office

6441 U.S. Highway 11

Springville, Alabama 35146

Phone: (205) 467-2225

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