CULLMAN BANKRUPTCY ATTORNEY
COLLINS LAW OFFICES, P.C.  (256)739-1962


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3/5/2020

The Alabama Bankruptcy Book

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Don't forget about my book -- The Alabama Bankruptcy Book.  It discusses Bankruptcy Myths, has Answers to Common Bankruptcy Questions, and a whole lot more.  The best part is that is FREE to Alabama residents with no strings attached.  Now you can get the info you need to see if bankruptcy will work for you without having to see a lawyer first.  If you would like a copy of the book, please see the link under "Contact" in the menu or click here.  No one will call or bother you.

This book will dispel many myths and answer many questions regarding bankruptcy such as:
  • The effects of the Bankruptcy Reform Act (HINT -- Bankruptcy still works)
  • What happens to your stuff
  • How to save your house or car from foreclosure or repossession?
  •  How to stop lawsuits, garnishments, and collection calls and letters?
  • How you can still file and keep your property under the “new” laws?
  • How you can still get credit after you have filed bankruptcy?
  • How to wipe out credit card debt, medical bills and other debt?
 
 Don't believe the myths.  Educate yourself and don't let debt keep you down.


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3/5/2020

Will a bankruptcy in Alabama stop a garnishment that is already being deducted from my paycheck?

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​YES.  I have been getting a lot of questions about garnishments lately.  Both Chapter 7 and Chapter 13 bankruptcy filings in Alabama will stop garnishments.  This is accomplished in a two step process.  First, we must file your bankruptcy with the bankruptcy court and thereby obtain a case number for your bankruptcy. 

Second, in the Court which issued the garnishment (normally your county’s Small Claims Court, District Court, or Circuit Court) we file a Motion to Quash Writ of Garnishment.  In this motion we ask the Court that issued the garnishment to enter an order stopping the garnishment and to return to you any money the Court is holding or receives in the future from the garnishment.  This means that if we can catch it in time, we may be able to get some of your money back.

Having said this, I would strongly recommend filing a bankruptcy prior to a garnishment going into effect.  I say this only because I know a garnishment taking 25% of your wages is not going to leave much to live on, much less enough to save to pay for a bankruptcy.

Please note that a bankruptcy will not stop a garnishment or income withholding order related to child support.


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3/5/2020

Do I qualify to file a Chapter 7 bankruptcy in Alabama under the “new” bankruptcy laws?

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Many people have been convinced that the bankruptcy reforms that went into effect in October of 2005 have made it impossible for most people to file Chapter 7 bankruptcies.  Nothing could be further from the truth.  Yes, there is now a “Means Test” which was intended to screen out people with “too much income.”  But, in my experience almost everyone whom I have counseled with regarding filing a Chapter 7 bankruptcy who could have filed for Chapter 7 bankruptcy before the 2005 reforms still qualify to file a Chapter 7 bankruptcy in Alabama after the reforms.  Nationwide studies have confirmed this -- Porter Study Finds Bankruptcy Law Reform Has Hurt the Poor Most and Bankruptcy Reform’s Impact: Where Are All the “Deadbeats”?

How does the “Means Test” work?  First you see if you are over or under the median income for a family of your size in Alabama.  For a quick check click here.  If your household income is under the median income for the same size household in Alabama, then you have passed the “Means Test” and qualify to file a Chapter 7.

If you are over the median income, it DOES NOT mean you are disqualified from filing a Chapter 7 bankruptcy.  Most people can still file.  There is just more paperwork to do.  With the additional paperwork you are allowed to deduct taxes, housing costs, transportation costs, secured debt payments, medical costs, and many other costs.  After deducting these costs, most people have very little income that could be used to pay unsecured creditors; and therefore, can file a Chapter 7 bankruptcy.

The bottom line is, if you are having financial problems, do not let the “Means Test” scare you away from seeking good legal advice from a qualified bankruptcy attorney.   The qualifications to file a Chapter 7 bankruptcy in Alabama are still fairly low.  Despite anything you may have heard, there is a very high chance you can still file a Chapter 7 bankruptcy.  And, if you are one of the few who cannot file a Chapter 7, you can probably file a Chapter 13 bankruptcy and still be protected from creditors.


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3/5/2020

Can a bankruptcy stop my house from being foreclosed on in Alabama?

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Yes.  You may be able to save your house from foreclosure by filing a Chapter 13 bankruptcy in Alabama.  A Chapter 13 bankruptcy allows you to put your arrearage (the payments you have missed) in your Chapter 13 plan and pay them back over the term of your plan (usually 5 years).  You will have to pay the entire amount of your arrearage back over this period of time.  This in effect “catches up” your mortgage payments, keeping the mortgage company from foreclosing.

Other than allowing you to catch up your back payments the bankruptcy court cannot affect the terms of your mortgage.  Therefore, beginning the month after you file for bankruptcy you will have to begin making your regular monthly mortgage payments. 

This can be difficult since you were already missing payments and now you are to begin making your mortgage payments again plus a payment to the bankruptcy court.  This will require some serious budgeting and discipline, but it will be very important for you to make both of these payments.  While there may be some ways to prevent foreclosure if you miss payments post-petition (i.e. after your bankruptcy has been filed), it will be difficult.  You will also have to maintain your homeowner’s insurance coverage.

To stop the foreclosure your bankruptcy will need to be filed prior to the foreclosure sale.  The 2005 amendments to the bankruptcy laws have made the preparation of bankruptcy petitions much more time consuming.  I would recommend you see an attorney immediately and not later than 1 week prior to the foreclosure sale.

The bottom line is while it may take some cutting back on other expenses, a Chapter 13 bankruptcy in Alabama can save your house from foreclosure.

Do you have questions or comments regarding this topic?  Please email me.
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3/5/2020

Do I need to file bankruptcy?

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Filing for bankruptcy is a heart wrenching decision.  On the one hand you want to do what you promised your creditors you would do, but on the other hand you have to house, feed, and clothe your family and yourself.  There is no question that bankruptcy should be the last resort, but as to whether you should file or not, my classic lawyer answer is “It depends.”

First, we need to look at why you are considering filing bankruptcy.  The most common reasons are the following:
  • Are you behind on payments on your house and/or car and being threatened with foreclosure and/or repossession?
  • Are you using credit cards frequently to supplement your income with cash advances or purchases of necessities such as groceries and payments of utility bills?
  • Has your house been foreclosed on or have you had a vehicle repossessed?
  • Do you have more than one credit card maxed out or nearly maxed out?
  • Do you have more than $10,000 of debt with credit card companies and/or finance companies?
  • Have you frequently been using payday loans and/or check cashing lenders to make it through the next week or two?
  • Have you been sued by a creditor and/or are you currently or soon to be garnished?
  • Are you getting numerous calls and letters daily from creditors harassing you or debt collection agencies?
  • Are you borrowing from one lender to make the payment to another lender, i.e., are your robbing Peter to pay Paul?
  • Have you had your license suspended for causing an auto accident where you were not insured?
  • Do you have large outstanding medical bills that insurance did not pay and you cannot negotiate a payment you can afford?
 
If your answer to any of these questions is “Yes”, then it may be a good time to see an Alabama bankruptcy attorney.  This does not necessarily mean you should file bankruptcy, but it does mean you may need some legal advice.  The attorney may suggest some of the following alternatives to bankruptcy:
  • Tightening your budget.
  • Downsizing homes and vehicles.
  • Looking at consolidation loans (and then destroying all credit cards)
  • Getting a second part-time job for more income
  • Having a stay at home spouse or of age child obtain employment.
  • Temporarily getting financial assistance from family or friends.
  • Negotiating with creditors.
  • Doing nothing.
 
If any of these alternatives allow the possibility of a LONG TERM solution, then they should be greatly considered even though it may call for tough decisions and hard work.  Why?  Although bankruptcy can be a “quick fix”, it comes with some serious long term consequences to your financial future.

The bottom line is I and many other Alabama bankruptcy attorneys offer free initial consultations, so it will not cost you anything to see what your options are.  If after talking to an attorney, you think you can dig yourself out of the hole you are in without bankruptcy then definitely try that.  But, if it does not work out you will be prepared and should have a plan.

If you have further questions regarding this or other Alabama bankruptcy, debt, or budgeting questions please email me.

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3/5/2020

What happens if I have a claim or lawsuit that I may get some money from in the future, but I need to file bankruptcy now?

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When “Jane” came to me about filing bankruptcy she was in dire straits.  She had been sued by at least one creditor and was about to have her wages garnished.  If her wages were garnished, the loss of 25% of her wages not have left her enough income to keep her mortgage and utilities paid and meet her other necessities.

Jane met all the qualifications to be able to file a Chapter 7 bankruptcy, but there was an issue.  Jane’s father had died about one year earlier and his estate had a lawsuit against the nursing home where he died.  A person having a claim of some type, but currently being in poor financial shape is fairly common. Often times an on the job injury (Worker’s Comp) or a car wreck (Personal Injury) results in a loss of income and an inability to pay debt.  Jane had been told by the estate attorney that her father’s type of case, a wrongful death due to alleged malpractice by the nursing home, rarely settle and it could be years before the case went to trial.  Even then there was no assurance they would win.

So, what do you do?  First, I explained to Jane that if she wanted to file bankruptcy, it is absolutely required that the lawsuit/claim be listed as an asset.  This is very important and there has been a lot of litigation over this issue in the past few years.  Lawsuits and estates are public records and are impossible to hide, do not try.  Failing to list a claim or lawsuit on your bankruptcy petition may damage your chances of recovering any money from that lawsuit or claim.  Second, I informed Jane that if and when she becomes entitled to any money from the lawsuit, the money would have to be paid to the bankruptcy trustee of her bankruptcy case and she may receive very little of the proceeds.  The amount she would receive would depend on her remaining personal property exemption, the amount of the proceeds, and the amount of claims filed by creditors.  With knowledge of the possible outcome, Jane decided she still needed to file bankruptcy immediately.

Although Jane’s situation was different, it is normally required that the attorney representing the debtor in their lawsuit or claim file a motion with the bankruptcy court to be approved as the attorney and to have their fee contract approved as well.

 About a year after filing, her father’s wrongful death case settled.  Jane’s share was about $20,000.  What happened to the money?  The $20,000 was paid by the estate’s attorney to the bankruptcy trustee.  Jane still had $1,000 of her $3,000 personal property exemption available, so she was allowed the first $1,000.  The trustee received a fee out of the proceeds, normally 10%.  Then creditor claims were paid.  In Jane’s case only $12,000 of creditor claims were filed which was much less than her debt at the time she filed.  After all creditor’s claims were paid, Jane received the remainder.  So, all in all Jane received about $6,000 from the settlement.

I am sure Jane would have rather had the entire $20,000 share of the settlement, but her actual outcome really was not that bad.  If she had had the $20,000 immediately before she filed, she would have had to have paid all or almost all of it to creditors.  At least she was able to eat and pay her bills during the year before the case settled and was even able keep a good portion of the settlement after bankruptcy.  Remember, this is not always the case.  If all her creditors had filed claims, she would have only received the $1,000 exempt portion.

If you are having financial difficulties, find out the truth about how bankruptcy may be able to help.  Request my free book and/or call attorney Richard L. Collins or another experienced bankruptcy attorney.


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    I am an attorney located in Cullman, AL. I practice extensively in the area of consumer bankruptcy law, that is, I file Chapter 7 and Chapter 13 bankruptcies for individuals.  I handle cases all over North Alabama and have helped hundreds of clients through the bankruptcy process., I receive many referrals from former clients and their families and other attorneys. Why? Unlike other firms, I have a local office. If you are from out of town, we have the technology available to keep your traveling to a minimum. Also, unlike many firms, you will meet personally with an attorney, not a paralegal. An attorney will handle your case from start to finish. ,

    You will be taken care of throughout the process. We will obtain your credit reports to ensure all your creditors are listed. We will assist you in preparing the forms and then obtain your credit counseling certificate which is required prior to filing bankruptcy for you. We will explain the pros and cons of filing for bankruptcy and the different types of bankruptcy. We will not pressure you into entering into a bankruptcy process that you do not understand. We will be with you side by side through the bankruptcy process. , We represent individuals and work hard to lead them out of the debt traps, through the maze of bankruptcy laws, and to the relief of a bankruptcy discharge.

    ​I am a member of the National Association of Consumer Bankruptcy Attorneys, the American Bar Association, the American Association for Justice, the Alabama Bar Association, and the Alabama Association for Justice. I am a 1996 graduate of the University of Alabama School of Law. I also have a BA degree from the University of Alabama. The Law Office of Richard L. Collins is a federally designated Debt Relief Agency. Richard L. Collins helps clients file for bankruptcy protection under the laws of the United States. Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

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Collins Law Offices, PC  helps clients file for bankruptcy protection under the laws of the United States.
​Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.
  • Home
  • Bankruptcy Info
    • Chapter 7
    • Chapter 13
    • Stop Foreclosure
    • FAQ'S re: Bankruptcy
    • Bankruptcy Attorney Services
    • Alabama Bankruptcy Blog
    • Credit Rebuild Education
  • Contact
    • Get Started
    • Free Bankruptcy Book
    • Free Rebuild Life Book
    • Contact Us
    • Make a Payment
    • Location
  • About Bankruptcy Lawyer