People who are burdened with debt, threatened with foreclosure, or facing garnishment have legal options for relief. Filing for bankruptcy under Chapter 7 or 13 of the federal Bankruptcy Code stops those actions. Here are a few questions to ask your attorney to help you understand the process.

Ask Your Bankruptcy Attorney These 5 Questions

1. What Is Chapter 7 Bankruptcy?

Sometimes called straight bankruptcy, Chapter 7 is a liquidation proceeding. The debtor can claim exemptions to protect certain property, and the trustee has the power to sell nonexempt items to pay creditors. Within six months after filing, the court grants the debtor a discharge of remaining debt.

2. What Is Chapter 13 Bankruptcy?

Often called a wage earner plan, Chapter 13 bankruptcy allows people to pay their debts over a period of three to five years. At the end of the period, the court discharges the remaining debt. Chapter 13 is a good option for individuals with a steady source of income who want to make payments so they can keep their property.

3. How Much Am I Allowed to Keep?

In Alabama, the homestead exemption is $5,000. Up to $3,000 of personal property is exempt, and you can keep an unlimited number of family pictures and personal items. Other exemptions are available, and your bankruptcy attorney will discuss them with you.

4. Can I Be Fired From my Job for Filing? 

No. The Bankruptcy Code, U.S.C. Sec. 525 prohibits all employers from discrimination against all employees for filing bankruptcy.

5. Who Will Know if I File?

Generally, people will not know unless you tell them. Chapter 7 and Chapter 13 bankruptcies remain on your credit history for 10 years, though, so potential creditors will know.

The bankruptcy attorneys at Pearce Law Firm in Foley, AL, are devoted to helping individuals get the fresh start they need. With their deep understanding of the Bankruptcy Code and their passionate dedication to the success of their clients, they give you peace of mind about your financial situation. Learn more about their services and schedule a consultation by visiting their website now or calling (251) 971-2676 today.