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ABAP Brochure Flipbook PDF
Formed by four of Alabama’s Volunteer Lawyer Programs, this program assists low income individuals needing to file bankr
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About ABAP What is ABAP
What is Bankruptcy
The Alabama Bankruptcy Assistance Project (ABAP) was formed by four of Alabama’s Volunteer Lawyer Programs to assist low income individuals needing to file Chapter 7 bankruptcy.
Bankruptcy is a Federal Court action that may allow people who cannot pay their debts to get a fresh financial start. Filing bankruptcy stops all creditors (people to whom you owe money) from trying to collect debts from you until your debts are sorted out by law. The decision to file for bankruptcy should be made only after careful thought, consulting with an attorney, and determining that it is the best way to deal with your financial problems.
The Project seeks to assist low income individuals in preparing the bankruptcy petition and forms, providing representation, and giving counsel and advice at no cost to eligible clients.
Consumer Bankruptcy Types Chapter 7 and Chapter 13 are sections of the Federal Bankruptcy Law that are used for individuals wanting to file bankruptcy. Chapter 7 bankruptcy eliminates or “discharges” debts. Whether you can file under Chapter 7 depends on your income. If your income is above the limit set by the law, you will have to file under Chapter 13 and pay at least a part of your debts. Under Chapter 7, if you have property, you may have to give it up or surrender it to the trustee (the administrator of your estate) or creditors. Most low-income debtors have little property and are not at risk to lose any property because it is all exempt. Examples of exempt property include: equity in your home, equity in your car, a certain amount of household goods, money received as social security, veteran’s benefits, public assistance, pensions, and similar types of income. Non-exempt property may be sold by the Chapter 7 trustee who will distribute the proceeds to your creditors. The rest of your debts –the ones for exempt property and debts not connected with property- will be “discharged” so you never have to pay them. Chapter 13 allows you to pay your debts based on your current income, over a period of three to five years. The big advantage of Chapter 13, is that it gives you a chance to keep your assets like a home or car, by letting you catch up on certain past due amounts while making current payments. To file under Chapter 13, you need a regular source of income that is enough to support the payment plan. ABAP does not assist with Chapter 13 bankruptcies, but most lawyers will include their attorneys fee in your bankruptcy plan, allowing you to pay their fee as you make your bankruptcy plan payments. If you need assistance filing a Chapter 13 please contact a private attorney or the Alabama State Bar Lawyer Referral Service at 1-800-392-5660.
Beginning a Chapter 7 A chapter 7 case begins with the debtor filing a petition with the bankruptcy court that serves the area where the individual lives. In addition to the petition, the debtor must also file with the court: (1) schedule of assets and liabilities; (2) schedule of current income and expenditures; (3) statement of financial affairs; and (4) list of contracts and unexpired leases. Debtors must also provide a copy of the federal income tax returns or transcripts for the previous 2 years and the current tax year. Individual debtors with primarily consumer debts have additional document filing requirements not listed above.
Bankruptcy
Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. Filing a petition does not “stay” all types of actions, and the stay may only be effective for a short time in some circumstances. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.
CAN
CAN NOT
Eliminate most of your debts in a Chapter 7 bankruptcy, which is called a discharge to give you a fresh start
Eliminate child support, alimony, court restitution orders, criminal fines, debts for personal injuries resulting from driving under the influence (DUI), certain taxes, debt obtained by fraud, debts for causing willful and malicious injury, and for certain intentional acts
Stop wage garnishment, debt collection, and creditor harassment
Discharge new debts after bankruptcy petition has been filed
Restore your phone, electric or gas services, after payment of a security deposit, or stop utilities from turning off your services
Protect cosigners on your debts (When someone has cosigned on a debt, the cosigner may have to repay all or part of the debt even though you have discharged the debt in bankruptcy)
Allow you to get your driver’s license back, if it was suspended due to a debt related to an uninsured auto accident but only if you get insurance
Eliminate certain rights of secured creditors (In general, you cannot keep collateral for loans unless you continue to make payments)
your
You may not have to file for bankruptcy •
You have only a few debts and have strong defenses to each. This means that you have a good legal reason not to pay the debt.
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Your after-tax pay is so low that your wages legally cannot be garnished.
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You do not own your home.
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You can afford to pay all of your current debts or bills without hardship.
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All of your income or assets are from protected sources such as Social Security, Veterans benefits, alimony or child support, public assistance or unemployment compensation, and in some instances, a pension.
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You owe only for medical bills and do not have insurance. (But if your wages are garnished for medical bills, then filing may be wise.)
Eligibility ABAP and the Volunteer Lawyers Program can only assist people who meet certain financial conditions and certain asset limits. Our program accepts clients that are within 125% of the poverty guidelines. These guidelines are updated each year. Call us today to see if you qualify for bankruptcy assistance at 1-888857-8571.
Contact local Volunteer Lawyers Programs for bankruptcy assistance (256) 539-2275 | www.vlpmadisoncounty.org Montgomery Volunteer Lawyers Program (Montgomery County) (334) 265-0222 | www.montgomeryvlp.org South Alabama Volunteer Lawyers Program (Mobile, Baldwin, Washington & Clarke counties) (251) 438-1102 or (855) 997-2857 | www.savlp.org Alabama State Bar Volunteer Lawyers Program (All other counties) (888) 857-8571 | www.alabar.org/programs Alabama Bankruptcy Assistance Project PO Box 671 Montgomery, AL 36101
How to apply
Madison County Volunteer Lawyers Program (Madison County)