All of these blog posts provide some general bankruptcy information and concern the filing for protection under the Bankruptcy Code. They include discussions of such things as the means test, filing for Chapter 7, Chapter 13, and other such bankruptcy issues. Bankruptcy Blog PostsIf you have any questions or want to know more about the bankruptcy process then take a look at the different blogs on here and if you don’t find and answer then give us a call.

We handle bankruptcy cases all across the State of Alabama and we hope these posts can provide some useful bankruptcy information. There is a blog post on bankruptcy exemptions that explains a little about what property you can protect from being liquidated in a Chapter 7 bankruptcy. There is a blog post on the different people involved in the bankruptcy process including the role of the Trustee in handling your case. One of the jobs of the Trustee includes an evaluation of your bankruptcy estate (which is all of the property that you own) to determine if there are any assets they can possible sell and distribute money to your creditors. 

Those are some of the many blog posts about the bankruptcy process. If you have any questions or want to say something about any of our posts then feel free to leave a comment or give us a call at (205) 201-1789.

Is it Better to File Bankruptcy or Just Not Pay

            When you are feeling overwhelmed by debt, it is common to ignore the situation and  wish it would just go away.  Unfortunately, the problems don’t go away and, in fact, just get worse.  You try ignoring the bills and collection letters, but they just keep coming.  Should you file bankruptcy or hope the creditors will eventually leave you alone?

            There are so many advantages to filing bankruptcy rather than ignoring the debt.  One of the most important things about bankruptcy is the “automatic stay.”  This is a legal way to stop creditors from harassing you about the debt you owe.  The automatic stay remains in effect during the entire time you are in your bankruptcy case. Is it better to file bankruptcy or just not pay debtsIf a creditor violates the automatic stay, you can sue that creditor in bankruptcy court.  The automatic stay is so powerful that its enforcement by the court continues after your bankruptcy case is finished and discharged.  Under the automatic stay, creditors cannot call you, write letters to you, sue you, or communicate with you in any way.    If you just stop paying your debts rather than file bankruptcy, creditors are free to harass you and continue to make your life miserable.

            A second advantage is that bankruptcy offers two options to handle your debt.  Chapter 7 is a bankruptcy case in which you can keep property while not having to pay your unsecured debts.  Unsecured creditors include credit cards, medical bills, and payday loans.  Chapter 7 bankruptcy is the legal way to not pay debt.  Chapter 13 is a plan to reorganize and repay debt. There are many options to repay debt, and your bankruptcy attorney will have review your income and debts to set up a payment plan for you.  Bankruptcy has options that you can afford to handle your debt.

            Another advantage is that bankruptcy stops all collection actions and lawsuits.  Creditors will file lawsuits against you if you default and do not pay your debts.  A lawsuit quickly turns into a judgment against you.  Creditors can now garnish your paycheck, garnish money from your bank accounts, and put liens on your house.  Bankruptcy immediately stops these actions — even if you already have a judgment.  Not filing bankruptcy can result in the loss of hundreds of dollars through garnishments and puts you even further behind financially.

            Bankruptcy can actually make your credit score increase.  When you ignore your debts, creditors continue to post negative information on your credit report every month.  Collection actions are also posted on your credit report.  Your credit score will continue to decline every month when you do not pay your debts or even if you do not pay on time. Bankruptcy stops creditors from posting negative information on your credit report.  It’s true that your credit score goes down when you file bankruptcy. However, your score starts going back up once you get your discharge because there is no longer any negative information being posted by creditors and your debt to income ration is improved when your unsecured debts are eliminated.  Even in the repayment plan of a Chapter 13, your credit score will still start going up.

What Are Bankruptcy Schedules and Exemptions

     When you file for bankruptcy, there are certain documents that the bankruptcy law requires you to file with your case.  First is your petition which contains all of your personal information.  The second set of documents are your bankruptcy schedules.  The schedules are a snapshot of your financial picture at the exact moment that your case is filed.  Although there are other documents that are required to be filed, your schedules are the largest and most comprehensive of the paperwork which you file.  There are several categories for your schedules which are listed as Schedules A through J.

            You must list in Schedule A all interests in real estate in which you are on the deed. Real estate includes land and buildings.  Schedule A provides the location and value of your real property interests.  Generally your attorney will use the tax assessor value, which is the value on which your property taxes are based.  You should also be sure to tell your Birmingham bankruptcy attorney if anyone else is on the deed with you. 

            Schedule B lists your interests in personal property.  Personal property consists of all things that are not real estate, such as vehicles, household goods, electronics, clothing, and bank accounts.   What Are Bankruptcy Schedules and ExemptionsPersonal property value is calculated using the replacement cost of a like item in the same condition.  If someone has died and you will be inheriting property or money, you will have to list this information on Schedule B even if you have not received the property yet. 

            Exemptions are listed on Schedule C.  Exemptions are amounts of equity in property that you are allowed by law to keep if the property were sold.  This does not mean that your property will be sold. Rather, it is a way for the Bankruptcy Court to calculate equity in your property.  State law is usually used in the exemption calculation, so your bankruptcy lawyer will have to review your property and apply your exemptions.  This schedule can be complicated and your bankruptcy attorney can explain the results of the exemption calculations to you.

            The schedules which address your creditors are Schedules D, E, and F.  The debts are arranged by secured, priority, and unsecured.  Schedule D lists all secured debts, including mortgages, vehicle loans, and other loans you owe in which you used the money to buy property.  Schedule E are priority debts.  These debts are income taxes, back child support, and court fines.  You cannot discharge priority debts; therefore, you are required to pay them.  Schedule F is a listing of all of your unsecured debts, such as credit cards, medical bills, payday loans, and signature loans. 

            Schedule G is a listing of leases and contracts that have not been fully performed. You will list the leases which you are assuming (continuing to pay) and those which you are rejecting (stop paying).  Schedule H lists the debts in which you are a co-signor on someone else’s debt or if someone is a co-signor on your debt.  A co-signor is a person who promises to pay a debt if the other person fails to pay it. 

            Schedule I sets out your monthly household income.  Income is based on the entire household.  If your spouse is not filing bankruptcy with you and you are living together, any income or wages received by the spouse has to be listed. Most income is from wages and the figures are taken from your pay stubs.  If you have a business as your income, you will list your income minus expenses for a net income amount for each month.  You will also list child support, alimony, retirement, food stamps, and disability. 

            Schedule J is a list of your monthly expenses.  The expenses are also for the entire household.  Sometimes it is difficult to list a set amount for expenses that change each month, such as utility bills, so you will use an average for those expenses.  You should also include expenses that you pay less frequently, such as car tags and insurance. 

            Schedules are a very important part of your bankruptcy filing in Jefferson County, Alabama.  You must be truthful and disclose all assets, income, and expenses.  It is best that you tell your attorney too much information than to omit something that should have been disclosed.