Alabama Bankruptcy Basics
If you have lived in Alabama for at least 180 days and cannot pay your bills as promised, you might qualify to file an Alabama bankruptcy case. Most people who file an Alabama bankruptcy choose debt liquidation under Chapter 7 or partial debt repayment in Chapter 13.
It is not very easy to qualify for Chapter 7; you generally must earn less than your state's annual median income level. As of 2013, the yearly median income for a single Alabama resident was $39,307, according to the United States Census Bureau. A two-member household could bring in up to $48,166 per year, while a family of four could earn up to $63,388 annually. If you earn more money, you must prove your inability to partially pay your creditors while covering basic costs of living. Cable television and Internet do not count as basic costs of living. Otherwise, you must repay some of your debts under a Chapter 13 plan or not file any type of Alabama bankruptcy.
If you have lived in the state for at least two years, you can use Alabama bankruptcy laws to your advantage so officials cannot sell your assets to offset your creditors' financial losses. As of 2013, Alabama residents could keep up to $5,000 in real estate equity and $3,000 of any type of personal property. Married debtors filing bankruptcy together can double these exemption amounts. Generally, books, family heirlooms such as pictures and Bibles, clothing, pensions, public benefits, and retirement accounts are safe despite your Alabama bankruptcy status.
Unless you qualify for an installment payment plan or a fee waiver, filing any type of Alabama bankruptcy case will cost you at least a few hundred dollars. As of 2013, it cost $306 to file Chapter 7 and $281 to declare Chapter 13, according to the United States Bankruptcy Court Southern District of Alabama. While you can legally file bankruptcy without an attorney, keep in mind that Alabama court officials are not allowed to give you any type of legal advice. If you have significant assets to protect, you are probably better off spending about $1,000 to hire a qualified attorney. Also, judges have to throw many legitimate cases out of court because of paperwork errors that could have been avoided if the debtor had hired an attorney. Considering the monetary savings and peace of mind a well-executed Alabama bankruptcy offers, it is usually well worth the modest cost to hire some type of legal counsel.