If you find yourself facing debts you can't pay off, you may want to file for bankruptcy. This financial tool allows certain debts to be discharged, meaning you don't have to pay them back. A bankruptcy lawyer can prepare the paperwork for you. Get the facts about Chapter 7 bankruptcy below.

An Introduction to Chapter 7 Bankruptcy

How does Chapter 7 work?

A Chapter 7 filing allows your debts to be discharged in months. A trustee will take on your case and oversee the liquidation of your assets, using the resulting funds to pay off creditors. The remainder of the debts are then discharged.

Will you lose all your possessions?

Your bankruptcy lawyer can make a case for exempt property that you can use to regain your financial footing. In Alabama, for instance, this includes tax-exempt retirement accounts, up to $15,500 worth of property value, and 75% of your income.

What are the pros & cons of filing?

The advantage of Chapter 7 is that it clears your debts and quickly stops creditors from demanding payment. However, the filing will remain on your credit report for 10 years. Your bankruptcy lawyer can’t get you out of all debts. Back taxes, alimony, and child support, for example, can’t be discharged.

Who qualifies for Chapter 7 bankruptcy?

You must pass a means test that compares your income to your state's median family income. If your income is less than the median, you qualify. If it's more, a further assessment is made to determine if you have enough disposable income to qualify for Chapter 13 bankruptcy instead. 

Deciding which type of bankruptcy makes the most sense for you requires the insight of a knowledgeable bankruptcy lawyer. Let Padgett & Robertson, Attorneys at Law of Mobile, AL, advise you. Their competent team has over 35 years of experience. Learn more about their work on their website. Call the law office at (251) 342-0264 for a free consultation with an attorney,

Disclaimer: No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. We are a debt relief agency. We help people file for Bankruptcy relief under the Bankruptcy Code.