The cost of a bankruptcy lawyer in Alabama will vary depending on a number of factors, including the complexity of your case, the location of the law firm, and the attorney’s experience and expertise.
Typically, attorneys charge a flat fee or an hourly rate for bankruptcy filings. Most attorneys will provide an estimate of the cost of their services after an initial consultation. In Alabama, the average cost for a bankruptcy lawyer is between $1,000 and $2,500 for a simple Chapter 7 bankruptcy filing.
However, the cost can be higher for more complex cases or for Chapter 13 filings. It is important to ask for estimates from multiple bankruptcy lawyers to compare prices and experience before making a decision.
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Is bankruptcy debt forgiven?
No, bankruptcy debt is not usually forgiven. Bankruptcy is a legal process that is designed to help individuals and businesses manage their debts. Under the different types of bankruptcy, some debts may be included in the discharge, which means the debtor will no longer be responsible for them.
However, in most cases, debtors are expected to repay their creditors in full, with the amount owed determined by a court. Depending on the type of bankruptcy, some debts may not be eligible for discharge and must be repaid even after bankruptcy is completed.
Examples of typically non-dischargeable debts include certain taxes, student loans, alimony, and certain criminal fines. Additionally, creditors may be able to seek relief for certain secured and priority debts not included in the bankruptcy discharge.
Therefore, it is important for debtors to understand all of their obligations and responsibilities before filing for bankruptcy.
Do you pay all debt in Chapter 13?
No, not all debt is paid in a Chapter 13 Bankruptcy. There are different types of debt that can be discharged, such as unsecured debt, or debt that is not secured by collateral, which includes credit card debt, medical bills, and some types of personal loans.
Other debts, such as child support, alimony, student loans, fines, and taxes, cannot be discharged in Chapter 13 bankruptcy. Additionally, secured debts such as car loans or mortgages must still be paid, although the terms of the loan may be modified in order to make it more affordable.
Chapter 13 is most commonly used when a debtor has a steady income and can make regular payments to the court-appointed trustee. These payments are then distributed to the creditors and can last anywhere from three to five years.
At the end of the repayment period, any remaining unsecured debt may be discharged. It is important to remember, though, that filing for Chapter 13 does not guarantee that a debtor’s debt will be discharged.
The case must prove that the debtor cannot pay their debts in full and is acting in good faith to resolve the financial situation.
What is a normal Chapter 13 payment?
A Chapter 13 payment is the amount the debtor pays each month to the Court appointed trustee in order to pay back their debts. The payment amount depends on the debtor’s income and their ability to pay back the debt.
The payment must be at least enough to cover the reasonable expected costs for administering the bankruptcy case such as filing fees and attorney fees, if any. For unsecured debt, such as credit cards or medical bills, the payment must be enough for the creditors to receive a dividend of at least 10%.
For guaranteed debt, such as car loans and mortgages, the payment must be enough so that the debt is paid off over the life of the Chapter 13 plan.
The Court will review the debtor’s budget to determine what the reasonable Chapter 13 payment should be. They will look at their income, expenses and debts to determine how much money is available for their creditors.
They will also look at certain expenses that are allowed under the bankruptcy code, such as payments on support obligations or tax arrearages, and subtract those amounts from what is available to the creditors.
Each debtor’s payment can vary widely depending on their income and debts, so it can be difficult to provide a general answer to what a normal Chapter 13 payment is. However, the payment will usually be between 10-60% of the unsecured debt, depending on the debtor’s income.
Ultimately, the Chapter 13 payment should be reasonable and affordable for the debtor. This ensures that the debtor is able to complete their Chapter 13 plan and be successful in their bankruptcy.
What percentage of debt is paid back in Chapter 13?
In Chapter 13 of the U. S. Bankruptcy Code, the debtor must submit a repayment plan to the court outlining how they will pay back their creditors. The amount of debt that must be repaid in a Chapter 13 plan depends on several factors, including the type of debts owed, the income of the debtor, and the value of the debtor’s assets.
Generally, debtors must make payments over a three- to five-year period, although some repayment plans may be for a longer period of time. During the repayment period, the debtor typically must make monthly payments to the court-appointed trustee who distributes the repayment funds to creditors according to the approved repayment plan.
The exact percentage of debt ultimately repaid through the Chapter 13 repayment plan depends upon the facts and circumstances of each individual case. Numerous factors can impact the amount of debt repaid, such as the total amount of debt, the types of debts owed, the length of the repayment period, current income of the debtor, and available assets.
While the repayment plan provides a framework for the repayment of debts, creditors will typically not receive 100% of their debt under a Chapter 13 repayment plan. On average, debtors repay between 10-60% of their total debt owed over the life of the repayment plan.
Do you get money back from Chapter 13?
Yes, you may get money back from Chapter 13. When you file for Chapter 13, you are essentially proposing a repayment plan to your creditors. This plan is typically structured over a period of three to five years and involves payments to a bankruptcy trustee.
The Trustee, in turn, distributes funds to the creditors on your behalf, who then forgive the difference between what you owe and what you can actually pay. In most cases, you will receive a refund from any portion of your plan payments that are in excess of the debt balance.
Additionally, in the event that a creditor files a claim against your assets and is unsuccessful, you may be able to receive reimbursement. The amount you receive depends on a variety of factors, such as the state you live in, the amount of time allowed to repay the debt, and the type of debt accrued.
How long does it take to recover from bankruptcy chapter 13?
The length of time it takes to recover from bankruptcy can vary widely depending on the individual’s financial situation and the type of bankruptcy being filed. Generally speaking, bankruptcies that fall under Chapter 13 take 3 to 5 years to complete, but even then, the individual will likely be required to continue making payments on their discharged debts for an additional period of time depending on how much debt they had when their case was first filed.
During this period of continued payments, debtors must also abide by terms and conditions set forth by the court and their creditors, including reestablishing their creditworthiness and meeting any other obligations such as treatment programs or classes.
Once the repayment plan is successfully completed, the court will issue a discharge, formally deleting the debts listed in the plan. However, it is important to keep in mind that depending on the circumstances and the type of debt, some obligations may still need to be paid after bankruptcy, as not all types of debt are excluded from the discharge.
In addition to the court-mandated repayment plan, Chapter 13 filers should take the necessary steps to repair and rebuild their credit score. This can often be accomplished in as little as 12 to 24 months after bankruptcy, but consistent financial discipline and timely payments are essential to building a good credit score.
Additionally, the filer should strive to save money, pay off as much debt as possible, and practice good credit habits such as paying bills on time, staying within credit limits, and monitoring any open accounts or other debt.
Taking these proactive steps after bankruptcy can go a long way in helping to recover from a Chapter 13 filing.
What is the downside to filing Chapter 13?
The primary downside to filing Chapter 13 is the complexity of the process. Chapter 13 bankruptcies require debtors to make regular payments over a three to five year period, which can be difficult to maintain, depending on the debtor’s financial circumstances.
Additionally, Chapter 13 bankruptcies require debtors to adhere to a repayment plan, which is often supervised by the court. This may result in the debtor having less control over their debt repayment than with other forms of bankruptcy.
Finally, there are limits to what debts can be included in a Chapter 13 bankruptcy. Certain types of debt, such as federal student loans or child support payments, cannot be discharged in a Chapter 13 bankruptcy.
Furthermore, debts that are not fully paid in the repayment plan prior to the end of the three- to five-year repayment period will remain after the bankruptcy is complete. This could mean additional payments for the debtor after the bankruptcy concludes.
Is it better to file a Chapter 7 or 13?
The decision to file for Chapter 7 or 13 bankruptcy depends on your individual financial situation and needs. Both Chapter 7 and Chapter 13 involve different processes and levels of bankruptcy protection, so you will want to carefully weigh the pros and cons of each for your individual situation.
Chapter 7 bankruptcy may provide you with the quickest way to get debt relief as it can involve the liquidation of your assets to pay off creditors. You will typically have some of your debts discharged and can receive a fresh start financially.
However, you may be required to surrender property that is not exempt and have less flexibility in terms of your payment obligations. Additionally, you could have difficulty obtaining credit in the future.
On the other hand, Chapter 13 bankruptcy offers a more structured debt repayment plan over the course of three to five years. It can allow you to keep more of your property and may be preferable for those who want to save their home from foreclosure or catch up on delinquent payments.
This can be a longer process, however, and you could face challenges finding financing in the future since it is still reflecting on your credit history.
Ultimately, the question of whether to file for Chapter 7 or 13 bankruptcy should be discussed with a qualified bankruptcy attorney. They can review your finances and discuss your options to help you make an informed decision.
Can you save money after filing Chapter 13?
Yes, you can save money after filing for Chapter 13 bankruptcy. While Chapter 13 does require you to pay back all or a portion of your debts, your repayment plan typically requires much lower monthly payments than you were previously making, as well as an extended repayment period.
Additionally, all of your creditors must accept the Chapter 13 repayment plan, which typically includes reduced payments and debt forgiveness. This means that you may be able to significantly reduce the overall interest you are paying on your debts and possibly even eliminate some of your debts completely.
Additionally, most Chapter 13 repayment plans last three to five years, with some lasting up to seven years. This gives you more time to save money and get your finances in order.
Does Chapter 13 reduce debt?
Yes, Chapter 13 is a type of debt relief for individuals and entails filing a repayment plan with the court to pay creditors over a period of time, usually three to five years, depending on your unique financial situation.
Your court-approved payment plan will consolidate your debts and, depending on your particular case, some of it may be eliminated. This can reduce the overall debt load you owe and make it easier to pay off.
Additionally, Chapter 13 can also help reduce interest rates, suspend late fees and stop collection actions.
In order to qualify for Chapter 13, you must have a regular income, meaning you are not an individual without a reliable source of income, such as those unemployed or self-employed. Once your application is filed and approved, the court will create a payment plan.
Payments will be based on your income, assets, and liabilities. In some cases, the court will adjust your payments so they are within your budget and you have some leftover money monthly for other expenses.
Moreover, if you keep up with your payment plan and make all payments as agreed, you may be able to discharge some of your debts at the end of the repayment plan and have a fresh start financially.
What happens when you file for bankruptcy in Alabama?
When you file for bankruptcy in Alabama, you begin the process of discharging certain debts and taking charge of your finances. The most common type of consumer bankruptcy filed in Alabama is Chapter 7 Bankruptcy, which helps individuals and businesses get relief from a wide variety of debts, including credit card debt, medical bills, unpaid taxes, and other consumer debt.
When you file for Chapter 7 Bankruptcy, you must provide a list of all your assets and liabilities to the court. The court will then evaluate your financial situation and may order that some of your assets be sold to pay off your debts.
Once you’ve provided a complete list of assets and liabilities, your bankruptcy trustee will determine which assets can be sold and which creditors will receive payment.
After filing for bankruptcy, your creditors are legally prohibited from trying to collect on any of your debts. This allows you to make fresh financial start, without the burden of overwhelming debt.
In certain circumstances, the court can also partially or completely discharge certain debts; this means you no longer have to pay them.
It’s important to understand that bankruptcy can have long-term consequences, including a negative impact on your credit score. Additionally, filing for bankruptcy does not always erase all of your debts; some debts, such as student loans and child support, are usually not discharged.
Therefore, it’s important to discuss your situation with an experienced Alabama bankruptcy attorney to determine if bankruptcy is the right option for you.
How quickly does bankruptcy go through?
The length of time it takes to complete a bankruptcy process varies depending on the individual circumstances. Generally speaking, it can take anywhere from three to six months from start to finish. In some cases, however, the process could take longer if there are more complicated financial issues at play or if you are filing for a Chapter 13 bankruptcy.
After filing for bankruptcy, the court will make a determination about your case – often within a month of filing. After the court renders its decision, the process of clearing your debts can take anywhere from one month to over a year, depending on the type of bankruptcy you choose and the complexity of your situation.
It is important to be patient, as the process can take a while. Additionally, it is important to follow all court orders and act promptly on any communication from creditors or the court. Doing so can help streamline the process and help ensure a successful outcome.
Will bankruptcy clear all debt?
No, bankruptcy will not necessarily clear all of your debt. Depending on the type of bankruptcy you file (such as Chapter 7 or Chapter 13), and the type of debt you owe (such as secured or unsecured debt), some of your debt may still remain after your bankruptcy is discharged.
Generally, secured debt (debt attached to an asset, such as a car loan) is not forgiven in a bankruptcy. You may still be required to pay back certain types of debt, such as student loans, back taxes, or child support payments.
Additionally, if there is debt that is joint with someone else, such as a co-signed loan, the other party would be solely responsible for the debt.
Do I have to pay debt if I declare bankruptcy?
No, you do not have to pay any debt if you declare bankruptcy. When you file for bankruptcy, it’s a legal process that can reduce or eliminate most of your debts, depending on your situation. Bankruptcy also offers protection from creditor harassment and can even stop foreclosure.
When you file for bankruptcy, an automatic stay goes into effect, which means that creditors must stop all collection activities against you. This includes demands for payment and even court judgments.
Creditors are prohibited from trying to collect any money from you or your property. Additionally, depending on the type of bankruptcy you file for, some or all of your debts may be completely wiped out.
This means that you do not have to pay any of your debts back if you file for bankruptcy. While this may be a difficult decision to make, bankruptcy could be the best solution for you if you are struggling to stay afloat financially.
