What does it mean when someone files for straight bankruptcy in Alabama?

Steele, AL—When a person files for “straight bankruptcy” in Alabama, they are filing for Chapter 7 bankruptcy. Straight bankruptcy is another way to refer to Chapter 7 bankruptcy and is one of the more common types of bankruptcy individuals file for.

When a person files for Chapter 7 bankruptcy, it is usually because they want to eliminate their debt and start fresh.

How Does Chapter 7 Bankruptcy Work?

Chapter 7 bankruptcy works like this¹:

A debtor files the necessary paperwork with the court and a trustee is appointed to their case.
After the trustee is made aware of all the assets the individual has, they will categorize them as either exempt assets or nonexempt assets. Exempt assets cannot be used to satisfy the debtor’s outstanding debt.
The trustee sells the debtor’s nonexempt assets and the money earned shall be used to pay creditors.
Any debt that cannot be paid with the proceeds earned from the debtor’s nonexempt assets being liquidated shall be discharged. It is important to note discharge is not available to partnerships or corporations, according to the United States Bankruptcy Court Southern District of Alabama.
The debtor is given the opportunity to start fresh (i.e. debt-free). While there are many benefits to being given a fresh financial start, debtors should be aware that the bankruptcy will remain on their credit report for seven to 10 years.

What else should a debtor know about filing for Chapter 7 bankruptcy in Alabama?

In addition to understanding the process, debtors should also be aware of the following if they are considering Chapter 7 bankruptcy:

Certain property that may be meaningful to them may be used to satisfy outstanding debt.
Certain types of debt cannot be discharged. This generally includes child support, taxes, and student loans.
Certain criteria must be met in order to qualify for Chapter 7 bankruptcy.

Thinking about filing for Chapter 7 bankruptcy?

The Steele, AL bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. understand that times get hard and sometimes, the best way to get a handle on debt is to file for bankruptcy.

If an individual or business in Alabama is considering filing for Chapter 7 bankruptcy and would like to discuss the process more in-depth with an experienced Steele bankruptcy lawyer, they can contact Hill, Gossett, Kemp & Hufford, P.C. at any of their office locations listed down below.

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