The first thing you should know if you’re thinking about declaring bankruptcy in Alabama, is that in order to file for bankruptcy, you first need to have been enrolled in a credit counseling program for at least six months before you file. After filing for bankruptcy you will also be required to finish a financial management instructional course. This is due to the 2005 Bankruptcy Act which carried with it may other certain stipulations regarding the process.
The first thing you must do when filing for bankruptcy in Alabama is to gather the necessary paperwork. This paperwork includes: an itemization of your current income sources, all major financial transactions in the past two years, your monthly living expenses, a list of your secured and unsecured debts, all assets and possessions owned, your last two tax returns, real estate deeds, car titles, and any relevant loan documents. In order to qualify for bankruptcy, you will need most or all of the aforementioned paperwork, so make sure you start gathering this information now. An attorney may be able to assist you.
After the paperwork is gathered, you may begin the process of filing. First take note of the specific exemptions that are included when filing for bankruptcy in Alabama. Exemptions are the types of property that is safe from creditors. Here are a few broad examples, be sure to get more specific information from your attorney. Exemptions include: homestead, insurance, miscellaneous business property from a partnership, pensions, tools of your trade, wages, and personal property such as books, clothing, and family portraits. Sometimes these exemptions are only protected up to a certain amount. This limit is often determined by the equity you have in the property as well. This is the difference between what is owed and what the property is worth.
When you are finally ready to file for bankruptcy in Alabama, then you and your attorney will need to file a two page petition along with the other needed forms to the Alabama district bankruptcy court. The technical term for these papers is ‘schedules’ and they basically outline the current status of your finances, using all of that paperwork you gathered before filing. You have to make sure that you are entirely honest when filling out this paperwork because if the judge feels you haven’t been honest, he or she may simply throw out your case.