How is bankruptcy started?
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How is bankruptcy started?
Which Chapter is best to eliminate/decrease a debt of $58752.05?
Asked on May 19, 2014 under Bankruptcy Law, Alabama
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Additional information is needed as to what this debt represents to determine if it is dischargeable in bankruptcy. For example, if it is a tax or a student loan, most likely it is not dischargeable in bankruptcy. If it is a medical bill, credit card debt, etc., then it is dischargeable in bankruptcy.
Depending on your income, you may be eligible to file Chapter 7 which is straight liquidation which eliminates certain types of debts. If you are not eligible to file Chapter 7, you can file Chapter 13; however, Chapter 13 requires a plan (budget) for repayment of creditors.
Whether you file Chapter 7 or Chapter 13, you will need to obtain the appropriate schedules (bankruptcy forms) from the bankruptcy court. The schedules may be available online. After completing the schedules which will require you to list your creditors, the amount owed, account numbers, monthly expenses, exemptions, etc., then you pay a filing fee and file your bankruptcy with the court. Your bankruptcy is effective upon being filed with the court. A hearing before the bankruptcy trustee will be scheduled and subsequently your bankruptcy is discharged which means that creditors won't be able to challenge it.
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