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You may not have to file for bankruptcy if: • You have only a few debts and have strong defenses to each. That means that you have a good legal reason not to pay the debt. For instance, you borrowed money to buy a car and it is a lemon. Instead of filing a bankruptcy petition, you can raise your claims and defenses against the manufacturer, dealer and your creditor if you are sued or try to reach an agreement with them. • All of your income or assets are from Social Security, Veterans benefits, public assistance or unemployment compensation or, in some instances, a pension, alimony or child support. • You owe only for medical bills. Medical creditors who get a judgment against you cannot force the sale of your house. Any court orders to pay them will have no effect until your house is sold or transferred. (But if your wages are garnished for medical bills, then filing may be wise.) • You can afford to pay all of your current debts or bills without hardship. • Your after-tax pay is so low that your wages legally cannot be garnished. • You do not own your home. Eligibility ABAP and the Volunteer Lawyers Program can only assist persons who meet certain financial conditions and certain asset limits. Our program accepts clients that are within 125% of the poverty guidelines. Theses guidelines are updated every year. Call us today to see if you qualify for bankruptcy assistance at 1-888-857-8571!
How to apply
Please contact local Volunteer Lawyers Programs for bankruptcy assistance. Madison County Volunteer Lawyers Program (Madison County) (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
Alabama State Bar
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 . 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.
Beginning a Chapter 7 What is Bankruptcy? Bankruptcy is a Federal Court action that may allow people who cannot pay their bills to get a fresh financial start. Filing bankruptcy stops all creditors (people to whom you owe money) from trying to collect debts from you, at least 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 it is the best way to deal with your financial problems.
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 new 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. Many low-income debtors have no property that they would lose because what they have is 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, veterans benefits, public assistance, pensions, and similar types of income. Non -exempt property may be sold by the Chapter 7 trustee who will distribute the money 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 from your current income over three to five years. The big advantage of Chapter 13 is that it gives you a chance to keep your 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 many lawyers will include their 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.
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives. In addition to the petition, the debtor must also file with the court: (1) a schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a list of contracts and unexpired leases. Debtors must also provide a copy of the tax return or transcripts for the previous 2 years and current tax year. Individual debtors with primarily consumer debts have additional document filing requirements. Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. But filing the petition does not stay call 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
Bankruptcy
What is ABAP
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, and debts for causing willful and malicious injury and for certain intentional acts
Stop wage garnishment, debt collection, and harassment
Discharge debts you get after your 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 for a debt, the cosigner still may have to repay all or part of the dent even though you have discharged the debt in bankruptcy
Allow you to get back your drivers license if it was suspended because you did not pay a debt related to an uninsured accident but only if you get insurance
Eliminate certain rights of secured creditors. In general, you cannot keep collateral unless you continue to make payments
What is ABAP
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.
What is Bankruptcy? Bankruptcy is a Federal Court action that may allow people who cannot pay their bills to get a fresh financial start. Filing bankruptcy stops all creditors (people to whom you owe money) from trying to collect debts from you, at least 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 it is the best way to deal with your financial problems.
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 new 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. Many low-income debtors have no property that they would lose because what they have is 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, veterans benefits, public assistance, pensions, and similar types of income. Non -exempt property may be sold by the Chapter 7 trustee who will distribute the money 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 from your current income over three to five years. The big advantage of Chapter 13 is that it gives you a chance to keep your 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 many lawyers will include their 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.
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives. In addition to the petition, the debtor must also file with the court: (1) a schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a list of contracts and unexpired leases. Debtors must also provide a copy of the tax return or transcripts for the previous 2 years and current tax year. Individual debtors with primarily consumer debts have additional document filing requirements. Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. But filing the petition does not stay call 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
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 .
Beginning a Chapter 7
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, and debts for causing willful and malicious injury and for certain intentional acts
Stop wage garnishment, debt collection, and harassment
Discharge debts you get after your 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 for a debt, the cosigner still may have to repay all or part of the dent even though you have discharged the debt in bankruptcy
Allow you to get back your drivers license if it was suspended because you did not pay a debt related to an uninsured accident but only if you get insurance
Eliminate certain rights of secured creditors. In general, you cannot keep collateral unless you continue to make payments
You may not have to file for bankruptcy if: • You have only a few debts and have strong defenses to each. That means that you have a good legal reason not to pay the debt. For instance, you borrowed money to buy a car and it is a lemon. Instead of filing a bankruptcy petition, you can raise your claims and defenses against the manufacturer, dealer and your creditor if you are sued or try to reach an agreement with them. • All of your income or assets are from Social Security, Veterans benefits, public assistance or unemployment compensation or, in some instances, a pension, alimony or child support. • You owe only for medical bills. Medical creditors who get a judgment against you cannot force the sale of your house. Any court orders to pay them will have no effect until your house is sold or transferred. (But if your wages are garnished for medical bills, then filing may be wise.) • You can afford to pay all of your current debts or bills without hardship. • Your after-tax pay is so low that your wages legally cannot be garnished. • You do not own your home. Eligibility ABAP and the Volunteer Lawyers Program can only assist persons who meet certain financial conditions and certain asset limits. Our program accepts clients that are within 125% of the poverty guidelines. Theses guidelines are updated every year. Call us today to see if you qualify for bankruptcy assistance at 1-888-857-8571!
How to apply
Please contact local Volunteer Lawyers Programs for bankruptcy assistance. Madison County Volunteer Lawyers Program (Madison County) (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
Alabama State Bar