Mobile Bankruptcy Attorney - Free Consultation
Filing for bankruptcy can be an extremely distressing experience. It can adversely impact your sense of self-worth and take a toll on your emotional health. However, bankruptcy can also help you get rid of your debts, provide you relief from financial pressures, and pave the way for your financial recovery.
At the Law Office of Brent Day, we offer a free consultation to advise you of your legal options and if filing for bankruptcy is the best option for you, we will file it for you.
Data shows that Alabama has the highest personal bankruptcy rate in the country. With a poverty rate of 20.1%, Mobile has one of the highest personal bankruptcy rates in the state. Over 40% of households in Mobile have at least one debt in collections and nearly one out of every five student loan borrowers is in default.
If you are overburdened with debt and do not have the means to pay it off, bankruptcy might be the right option for you. The hard-working Mobile, AL bankruptcy lawyers at Brent Day Law can assess your financial situation, tell you whether you should file for a Chapter 7 or Chapter 13 bankruptcy, and guide you through the process. Contact us today to find out how we can help you get your financial life back in order.
What are the Common Reasons People in Mobile, Alabama File for Bankruptcy?
The most common reasons for personal bankruptcy in Mobile, Alabama include:
- Medical expenses
- Substantial reduction in income
- Loss of employment
- Unmanageably large high-interest debt
Chapter 7 Bankruptcy in Mobile, AL
A Chapter 7 bankruptcy – also referred to as straight bankruptcy or liquidation bankruptcy – allows you to get rid of all your unsecured debts including credit card debts, personal loans, medical bills, and judgments against you. You can also get rid of secured debts like mortgages and car loans through a Chapter 7 bankruptcy – as long as you are willing to surrender the asset in question to the creditors.
To be able to file for a Chapter 7 bankruptcy, you need to pass what is called a Chapter 7 means test. There are two ways in which you can pass the means test. If your current household income (which includes your income as well as the income earned by your family members) is lower than the median household income for a family of your size in Alabama, you can pass the means test.
If your current household income is higher, you can deduct all the monthly expenses allowed under the law including mortgage payments, health and disability insurance payments, childcare expenses, alimony and child support payments, and calculate your disposable income. If the disposable income is too low for you to repay your debts within a reasonable span of time, you can pass the means test.
On the other hand, if your household income or disposable income is too high, a Chapter 13 bankruptcy might be the right option for you. In either case, you should be aware that filing for bankruptcy has an impact on your financial future. Therefore, it’s prudent to have the skilled bankruptcy lawyers from Brent Day Law in Mobile, AL on your side for the right legal advice.
Chapter 13 Bankruptcy in Mobile, AL
Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy does not liquidate your assets to pay off your creditors. Instead, it allows you to retain your assets by paying off all or part of your debts. It’s why Chapter 13 bankruptcy is commonly referred to as the wage earners’ plan.
Under a Chapter 13 repayment plan, you need to pay off certain debts in their entirety, while you only need to pay off a portion of other debts. Typically, you only need to repay a portion of your unsecured debts like credit card debts, personal loans, and medical bills.
The amount of debt you need to repay and the time period within which you need to repay it largely depend on the amount of money you make. If your monthly income is higher than the median income of a household of your size in Alabama, you need to repay your debts over a period of 60 months. If your monthly income is equal to or less than the median income of a household of your size, you need to repay your debts over a period of 36 months.
Generally speaking, the higher your disposable income, the larger the amount of debt you need to repay under a Chapter 13 plan.
The biggest difference between a Chapter 13 plan and a payment plan that your creditor might offer you under normal circumstances is that the terms of a Chapter 13 plan generally tend to be favorable to you.
For instance, under a Chapter 13 plan, you can pay off your past-due balances over a period of time without having to worry about late fees, penalties, or getting harassed by collection agents.
Many creditors might be willing to reduce your outstanding balance under a Chapter 13 plan. More importantly, you can get rid of most of your unsecured debts by paying off only a portion of the total amount you owe your creditors.
It should be noted that you are required to commit most of your disposable income – with the exception of qualified monthly expenses – under a Chapter 13 plan. Otherwise, the bankruptcy trustee might not approve of your proposed plan.
Struggling with Debt? Our Mobile, AL Bankruptcy Lawyers Are Ready to Help You!
At Brent Day Law, we have represented numerous residents of Mobile over the years and helped them get a fresh start in life. If you are struggling with debt and looking for a way out, we can protect you from creditor harassment, provide you with the right legal advice, and help you discharge your debts legally.
Our founder Brent T. Day is a highly experienced bankruptcy lawyer who is committed to providing the highest level of legal services to those who are overwhelmed with debt and struggling to make ends meet. Whether it is Chapter 7 or Chapter 13 bankruptcy, our legal team will be with you at every step of the process and help you get rid of your debt burden as fast as possible.
To find out how we can help you with your debt problems, call our firm today at 251-441-1925 or message us online and schedule a free consultation with a seasoned Mobile, AL bankruptcy attorney.