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Alabama Bankruptcy FAQ’s – Questions and Answers

What is the difference in Chapter 13 and Chapter 7 bankruptcy?

The major difference between a Chapter 7 and Chapter 13 bankruptcy is that in a Chapter 7 bankruptcy you continue to pay your regular payments on your secured debt ( house and car), whereas in a Chapter 13 bankruptcy all your debts except your future mortgage payments are placed in a bankruptcy plan which is administered usually over a five (5) year period. You have to have “regular” income in order to file a Chapter 13.

Should I file a Chapter 7 or a Chapter 13?

Your income level, property owned and previous bankruptcies will greatly determine whether you may be able to file a chapter 7 bankruptcy. If you qualify for a Chapter 7 bankruptcy then it is important to know whether a Chapter 7 bankruptcy will benefit you more than a Chapter 13. If you are behind on your mortgage, automobiles, child support, or taxes, it may be that a Chapter 13 bankruptcy will better fit your needs.

Do you get out of all debts if you file bankruptcy?

No. It depends on the Chapter of bankruptcy you file and the type of debts you have incurred. You do not get to keep cars and houses without paying for them. Although you can return houses and cars and get out from under the debts. A debt relief company may be contacted to discuss the potential ways in which you can consolidate your debts and become financially stable again. People who are from Ohio will get details here about debt relief companies, whereas other states can research their local areas for closer companies that can help discuss their options.

Can I keep my house and car if I file for bankruptcy?

If you are up to date in payments and do not have significant equity in your house and car then normally you may keep both in a Chapter 7 bankruptcy. Even if you are behind in payments and have equity in your house and car you may normally pay for and keep both in a Chapter 13 bankruptcy.

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