In Birmingham, Alabama, Chapter 13 bankruptcy is often referred to as Debtors Court. Debtors Court is an option for individuals and couples who cannot afford to pay all of their bills month-to-month, but who can afford to make smaller payments and gradually pay down their debts over time.
As a result, Debtors Court is a good option for Alabama residents who have some source of income and either do not qualify to eliminate their debts under Chapter 7 straight bankruptcy or prefer to minimize the long-term consequences of a Chapter 7 bankruptcy filing. While a Chapter 7 straight bankruptcy stays on your credit report for 10 years, a Debtors Court filing only stays on your credit report for 7 years. In addition, some creditors will view Debtors Court more favorably than Chapter 7 straight bankruptcy since you are paying back your creditors.
What to Expect in Alabama Debtors Court
When filing a Debtors Court case, here is what to expect:
- Credit Counseling Course
Before you can file a Debtors Court case in Alabama, you must take a credit counseling course. In order to save time, you are allowed to take this course online. The credit counseling agency’s website will ask you a series of questions and then provide you with helpful information regarding future financial decisions. Once you have finished the counseling, the credit counseling agency will email you a credit counseling certificate. The Biddle Law Firm will file this certificate with the Court for you in order to show the Court that you have completed the counseling.
- Filing Your Petition and Paying the Filing Fee
Here at The Biddle Law Firm, your attorney will gather the information that will you need in order to complete your Debtors Court petition. This information will primarily include a list of your creditors, your monthly income and expenses, and a schedule of your assets. Once your petition has been completed, your attorney will deliver that petition to the Court. If you are unable to pay the full filing fee of $313 at once, you are allowed to pay the filing fee in installments. In order to make this process as easy and convenient as possible, you are allowed to pay the filing fee in installments through your Debtors Court plan. If you need to reopen your Debtors Court case for any reason or need to convert your case to a Chapter 7 straight bankruptcy, there will be additional requirements. This is another reason why it is important to work with an experienced Debtors Court attorney.
- Protection Under the Automatic Stay
Once you file your Debtors Court case, you will receive the protection of the automatic stay. The automatic stay is a powerful federal law that prevents your creditors from harassing you or seeking to collect from you during your Debtors Court case. Also, the automatic stay stops your creditors from bringing a lawsuit against you, filing a garnishment against you, repossessing any of your vehicles, or foreclosing on your home.
- Developing a Debtor Court Payment Plan
The Debtors Court payment plan has often been called a “wage earner’s plan.” However, you do not have to have a job or earn a wage in order to qualify for Debtors Court. You may use any income that you receive in order to make your Debtors Court payment. This can include governmental benefits such as Social Security and Veterans Benefits. It can also include alimony or financial support from friends or family. The payment plan can extend for up to five years. The payment amount will be based on the amount of your total debt, as well as your income. Your attorney at The Biddle Law Firm can help ensure that you develop a plan that works for you.
- Attending the Section 341 Meeting
You will attend a hearing that is held by the Chapter 13 Trustee. Currently, this hearing is done on the telephone. The Trustee will ask questions that are related to your petition. Your lawyer from The Biddle Law Firm will be on the telephone call with you. Creditors are allowed to attend this hearing but rarely do so.
- Making Your Payment and Receiving a Discharge
You make your Debtors Court payment to the Chapter 13 Trustee. You may do this by mailing the payment to the Trustee or by going to the bank that the Trustee uses and making your payment. Once you have made all of your payments, you will receive a discharge of debts. This will complete the Debtors Court process and allow you to have a fresh start from past financial problems.
Request a Free Consultation with a Debtors Court Lawyer in Birmingham, Alabama
If you would like to know more about filing for Debtors Court in Birmingham, Alabama, please contact us here at The Biddle Law Firm at 205.328.3328 and we will be happy to provide you with a free consultation with a Debtors Court attorney located in Birmingham, Alabama.