How is bankruptcy started?

UPDATED: May 19, 2014

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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


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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