Common Bankruptcy Terms to Know When Filing for Bankruptcy in Alabama

Moody, AL—Whether an individual is interested in learning more about the bankruptcy process because their finances are out of order or is ready to take the leap and file, they are bound to run into terms they aren’t familiar with. To help an individual better interpret the information they come across, below are a few common terms defined that are likely to come up in bankruptcy-related context.

Bankruptcy-Related Terms to Know

The first group of terms describe identify the people or parties involved in a bankruptcy case.

Debtor. A person who files for bankruptcy is referred to as a debtor.

Creditor. A creditor is the party who the debtor either owes money to or is being accused of owing money to.

Trustee. The trustee is a person or corporation who is appointed by the court to oversee the liquidation or repayment process depending on the type of bankruptcy a person files for. For example, if an individual were to file for Chapter 7 bankruptcy, the trustee would be in charge of liquidating property belonging to the debtor’s estate and distributing the proceeds to creditors, according to the United States Bankruptcy Court Southern District of Alabama. Trustees assigned to Chapter 12 and 13 bankruptcy cases are also responsible for liquidating certain property as well as overseeing a debtor’s repayment plan.

This next set of terms are general terms that tend to come up often in conversation or context related to bankruptcy.

Liquidation. This is the process of selling a debtor’s property and using the proceeds to pay creditors.

Discharge. When a debtor is released from “personal liability” for debts, it means they are no longer required to pay the money owed back. It is worth noting that not all debts are dischargeable. Generally, student loans, taxes, and child support cannot be discharged when filing for bankruptcy in Alabama.

Automatic stay. An automatic stay is put into place once a debtor files their bankruptcy petition. This stops “lawsuits, foreclosures, garnishments, and all collection activity against the debtor.”

Need more information on how to file for bankruptcy in Alabama?

Anytime an individual is considering filing for bankruptcy, it is a good idea for them to sit down with an experienced Moody, AL bankruptcy lawyer to learn more about the process and if is the ideal solution to their monetary problems.

The Moody, AL bankruptcy attorneys at Hill, Gossett, Kemp & Hufford, P.C. will be happy to explain how bankruptcy works in Alabama and whether an individual’s circumstances qualify them to file.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11