What is the definition of bankruptcy?
Bankruptcy is a term that is thrown around when we’re dealing with debt.
You might you wonder, “What exactly is bankruptcy in Alabama?”
Here’s a general definition:
Bankruptcy is where, because we have too much debt and we don’t see a way to get out of it, we go to bankruptcy court to get protection under the bankruptcy code.
For consumers, there are two types of bankruptcy to look at.
There’s a Chapter 7 and a Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
A Chapter 7, also known as a straight bankruptcy, is where we pull all of our debts together.
After we bring them together, almost all of these debt are erased.
Generally (but there are exceptions), debts like student loans are not completely erased from your debt.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy, which is also known as debtor’s court, is where we add up all of our debts in court and pay them off over a 3 or 5 year period.
Bankruptcy is seeking protection from debt.
Remember when we’re talking about bankruptcy, we’re talking about going to court to gain protection.
We also go there to file a Chapter 7 bankruptcy, which is where we completely wipe out our debt.
Or we go there to file a Chapter 13 bankruptcy, which is where we may payments over 3 or 5 years to get back on top of our finances.
If you have any questions, feel free to contact us.
We have other articles that deal with bankruptcy that you might want to look at.
If you live in the state of Alabama and you have any questions about bankruptcy, you can reach us by phone at 1-205-879-2447.
You can also fill out a contact form and we will get in touch with you as soon as we can.
We will be glad to help either answer questions or help you decide what you should do.
I look forward to talking with you.
Have a great day!