In Alabama, bankruptcy provides a solution for consumers who are overwhelmed with debts. The claims provide several effective strategies for reducing and paying off debt. The fastest solution is the liquidation process. It is the sale of the consumer’s assets to settle several debts at once. A Chapter 7 Bankruptcy Attorney in Prattville, AL explains what claimants can expect when filing for chapter 7.
Conducting the Means Test
The means test is used to determine if the claimant has the ability to pay their debts. Their income statements for the last six months are evaluated to determine their projected annual income. If the claimant’s income is less than the median for their household then they pass the means test.
Cataloging All Assets Owned by the Claimant
A full list of assets is required by the bankruptcy court. During liquidation, the claimant has some protection for their primary home, but their vacation homes won’t fall under the homestead exemption. However, it is completely at the court’s discretion to determine what assets are sold and what is protected.
Starting the Liquidation
The court assigns a trustee to manage the liquidation. All sales are coordinated by the trustee, and the trustee distributes the funds to the creditors. Any exempted value for the asset is sent to the consumer. Typically, the assets are sold through direct sales, auctions, and quick sale opportunities. Any assets secured by the claimant after the liquidation are safe from the bankruptcy court.
What to Expect After Liquidation
The claim lasts up to six months, and the claimant is protected against creditors while the case is active. The bankruptcy remains on the claimant’s credit history for up to ten years. In some cases, the claimants walk away completely debt-free.
In Alabama, chapter 7 bankruptcy is beneficial in that it helps claimants become debt-free quickly. The entire process lasts up to six months and provides easier settlement of debts by selling off key assets. A trustee manages the process for the claimant, and the trustee pays all the creditors. Claimants who want to learn more about the cases contact a Chapter 7 Bankruptcy Attorney in Prattville AL through David Weston Attorney at Law right now.