Ragland, AL—Yes, all assets must be disclosed when a person or business files for bankruptcy in Alabama. If an individual is concerned that they must share with the bankruptcy court all of the assets they have, they should speak with a Ragland, AL bankruptcy lawyer to find out if now would be a good time to file or if they should put off doing so until it is a more suitable time to file.
Why must all assets be disclosed when a person files for bankruptcy in Alabama?
The bankruptcy court has several conditions that must be met, one of which includes disclosing all assets. While an individual is obligated to share everything they possess ownership of, it doesn’t mean the bankruptcy court will use it all to satisfy debts. In fact, the court does allow for certain assets to be exempt from being liquidated.
According to the Alabama State Bar, an individual can usually claim $7,500 for personal property when they file for Chapter 7 bankruptcy and $15,000 in homestead (i.e. equity).1
Now, the main reasons why the court requires all assets to be disclosed is so that (1) a debtor doesn’t take advantage of the legal system and, (2) the trustee can assess what can be liquidated and used to satisfy any outstanding debt.
Exempt Assets vs. Nonexempt Assets
When an individual decides to file for bankruptcy, the type they file for will determine which of their assets are protected from being liquidated. For instance, if someone were to file for Chapter 7 bankruptcy, they would only be permitted to keep $7,500 in personal property and $15,000 in homestead, and anything that is left would likely be liquidated and used to pay creditors, with the exception of certain assets.
Any debt that is left over after the trustee pays the debtor’s creditors with the proceeds will likely be discharged, unless it is a type of debt that is exempt (i.e. taxes, child support, etc.).
A Ragland, AL Bankruptcy Lawyer Can Help an Individual Understand Which of Their Assets are Protected From Liquidation
If someone in Ragland is considering filing for bankruptcy but has questions concerning their assets and what they could potentially lose if they file, they are encouraged to contact Hill, Gossett, Kemp & Hufford, P.C. to speak with an Alabama bankruptcy lawyer. the lawyers at this firm will be happy to answer any questions an individual has regarding filing for bankruptcy and determine whether they would make for a good candidate.
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:
2603 Moody Parkway, Suite 200
Moody, Alabama 35004
Phone: (205) 640-2000
7900 Parkway Drive
Leeds, AL 35094
Phone: (205) 699-5500
6441 U.S. Highway 11
Springville, Alabama 35146
Phone: (205) 467-2225