Legal Question in Bankruptcy in Alabama

Re: bankruptcy ? credit cards on;y?

Please read this response in conjunction with the excellent advice give by Mr. Rule and Mr. Harmon.

On the issue of consumer debt, specifically credit cards, there is a great reluctance, at least here in Alabama to discharge such debts if they make up more than a one third of the total debt for which discharge is sought and the debtor has a regular source of income.

In the Eastern division of the state the Bankruptcy Administrator's office will seek dismissal or conversion to a Chapter 13 plan if a Chapter 7 Bankruptcy has too high a porportion (in its opinion) of consumer credit card debt.

If the debtor can show that these are old debts and serious efforts at repayment have been made, or you have you used the credit cards to pay for essential services such as medical care, then you may be able to proceed with a Chapter 7 Bankruptcy.

This is not a self help area, contact a Bankruptcy attorney and do the numbers...

If we can be of assistance please feel free to contact us at Forrester & Associates, 256-435-1007.

Re: bankruptcy ? credit cards on;y?

(1) Without more facts about your financial situation, it is impossible to answer this question. First, you must ALWAYS disclose ALL of your debts. Then you may be able to have just the credit cards, medical bills, etc. discharged, and continue paying your home mortgage and keep your home. MAYBE. Depends on the value of your home, how much you owe on it, what other assets do you have, whether the home is owned jointly by husband and wife, whether the mortgage is in both names, etc.

(2) Of course only one spouse may file. Sometimes it is advantagious for only one of you to file. Sometimes it is more advantagious to file jointly. Again, this depends on a number of factors including those noted above.

Bankruptcy is complicated. YOU SHOULD CONTACT A BANKRUPTCY ATTORNEY IN YOUR AREA. YOU SHOULD MEET WITH HER OR HIM TO GET ADVICE. You should not try to make these decisions like this. It is absolutely impossible for you to make any kind of good decision without getting knowledgeable legal advice about this.

Re: bankruptcy ? credit cards on;y?

When you say "bankrupt against" that opens up two questions: 1) Do I disclose all my debts? Yes without a doubt otherwise the bankruptcy might get set aside and you might look at criminal penalties for fraud on the court. 2) Do I pay a debt?

This second question about what to pay and how much is the esssence of a bankruptcy. Normally house payments go on except in the most extreme cases because payments must be made to keep the house. One only stops house payments if you are ready to give up the house which I gather you are not. Credit card debts can often be reduced or avoided.

Whoever looks at your situation and advises will not take you into a bankruptcy until they are sure they can save the property you want saved or at the very least save as much as possible. There ar two basic options: Chapter 13, a payback plan, or chapter 7, liquidation with certain debts re-affirmed, for example the house note so you keep the house.

Both husband and wife need to talk to the lawyer together to decide the options...including if only one or both need to file.

Go sit down with a lawyer with all your papers, crunch the numbers and come up with the best options.