Personal Bankruptcy

Helping Individuals Eliminate Debt and Preserve Assets

Effect of the 2005 Changes on Chapter 7 and Chapter 13 Filings

The Bankruptcy Code was substantially changed in 2005. Before the new bankruptcy laws were formally enacted, bankruptcy attorneys aired commercials, imploring prospective clients to come in now before it was too late. At Brent W. Davis, L.L.C. in Birmingham, Alabama, we know that it is never too late to get out from under your debts through the legal process of debt relief. Contrary to what other lawyers purported back then, Chapter 7 and Chapter 13 bankruptcies are still options, just a little more complex with additional paperwork to handle. We will discuss your situation and work together to determine your goals and which form of bankruptcy will better serve those goals.

Chapter 7

Chapter 7 bankruptcy gives debtors a fresh start. Under Chapter 7, a trustee will liquidate an individual debtor's nonexempt property, and the proceeds will be distributed to creditors. The debtor will generally receive a discharge of all debts. Individuals without significant assets may find that filing a Chapter 7 bankruptcy is a good option.

Under the new bankruptcy laws, there is now a means test to qualify for Chapter 7 bankruptcy. Many clients come to us nervous about the Chapter 7 means test and stressed over their debts and what a bankruptcy will do to their credit rating and their lives. We provide a welcoming, non-judgmental environment for our clients.

Chapter 13

Chapter 13 bankruptcy basically establishes a repayment plan under the court's protection. Under the plan, the balance of any obligations may be extended or reduced. The debtor can receive a discharge from unsecured debts upon completion of the payments under the plan. Filing for Chapter 13 will reduce or eliminate your debts while protecting your home, car, or other assets. For more information about Chapter 13, please view our Chapter 13 Bankruptcy Information Center.

You should not worry about a stigma attached to filing for bankruptcy. Rather, you should feel a level of comfort and relief that your debt problems will be solved through a legal process. You can keep your house and your kids can attend school in the same district. The car you drive can remain yours. Our goal is to minimize, if not eliminate the embarrassment people feel when filing for personal bankruptcy.

For more information or to schedule an appointment regarding a personal bankruptcy, please contact us.

We are a debt relief agency. We help people file for relief under the Bankruptcy Code.