People in debt who are considering to file for bankruptcy may want to know what to expect before making a decision. If you are financially unable to pay your creditors, you can enlist the help of an attorney. Here, the legal team at The Gil Law Firm in Dothan, AL, answers some common questions they receive about the process.
4 FAQ About Filing for Bankruptcy
What Is Bankruptcy?
This is a federal legal process that gives individuals or businesses a fresh start from debt that has become too much to manage. Debtors start the legal process in court, which enables them to make payment arrangements, receive a discharge that relieves them of legal responsibility for paying their debts, or both.
Will Filing for Bankruptcy Wipe Out All My Debts?
It depends on the amount and type of debt. Credit card, doctor and hospital bills, and unsecured personal loans are some that are wiped out in a Chapter 7 or a Chapter 13 bankruptcy. Child support, alimony, and back taxes cannot be discharged, and courts discharge student loans only in rare cases.
How Do I Qualify for Chapter 7 Bankruptcy?
Debtors seeking to file under Chapter 7 must pass a means test. This determines whether they have low enough income and assets and high enough debt to receive a Chapter 7 discharge. If the debt-to-income ratio is too high, debtors can file under Chapter 13.
What Do I Need for Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy requires a steady source of income, which can include employment, unemployment benefits, a pension, or disability benefits. Debtors pay creditors for three to five years under a court-approved plan, and the court discharges any remaining debt when the plan ends.
Since 2000, individuals and businesses throughout Alabama, Georgia, and Florida have trusted the skilled bankruptcy attorneys at The Gil Law Firm in Dothan, to help with their financial problems. Whether they are preparing and filing Chapter 7 or Chapter 13 bankruptcy petitions, these dedicated professionals will provide high-quality legal services for you. Learn more about the team online. Call (334) 673-0100 for a consultation.