In Alabama, all claimants who wish to start a bankruptcy claim must begin by attending a credit counseling program. The programs prepare the claimant for the requirements of their bankruptcy case and provide them with financial management skills. A Bankruptcy Attorney in Wetumpka AL provides guidance for these cases.
Proving Eligibility for Bankruptcy
In Elmore County, the median income for a household is $54,159, and claimants who want to file for chapter 13 must have an income that is greater than this median. All claimants must provide pay stubs or income statements that show their income for at least the last six months to prove their eligibility. If they don’t have an income of at least the median for their household size, the claimants are limited to chapter 7 cases only.
The Requirements for Chapter 13
Chapter 13 requires the claimant to pay monthly payments to the court based on their new repayment plan. They can choose to pay these payments directly or have them deducted from their pre-tax wages. They must also refrain from starting any new lines of credit and use all their disposable income to pay debts that weren’t included in their claim.
The Requirements for Chapter 7
Chapter 7 is the liquidation process in which the court assigns a trustee to sell off assets, collect proceeds, and distribute the funds to creditors. The claimant must provide deeds and titles for all assets and will receive the exempted value for each asset that is sold based on their filing status.
What Happens After Bankruptcy?
The bankruptcy will remain on the claimant’s credit reports for a period of around ten years. They are no longer responsible for debts that were paid off or discharged through their bankruptcy. However, any outstanding debts that weren’t included remain the responsibility of the claimant. To know more, click here.
In Alabama, all claimants who want to start a bankruptcy claim must provide evidence of all debts and their income. The process requires them to establish eligibility and acquire permission for inclusion from their creditors. Claimants who want to start a case today can contact a Bankruptcy Attorney in Wetumpka AL at Courtney & Mann LLP today.
