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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

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

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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    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.
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