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Financial difficulties can be stressful and cause anxiety. You may realize that you qualify for a Chapter 7 bankruptcy in Alabama, but that the Alabama homestead bankruptcy exemptions make it impossible to file a Chapter 7 bankruptcy and keep your home. Now what? The purpose of this article is to walk you through a Chapter 13 Bankruptcy in Alabama and help you estimate your monthly payment plan and consider pros and cons before going down the Chapter 13 bankruptcy journey.

We will also highlight all the details regarding a Chapter 13 bankruptcy in Alabama, as well as extra opportunities on the path to financial freedom.This article aims to provide the primary aspects of a Chapter 13 bankruptcy in Alabama.

Now, why are we focusing on Chapter 13 bankruptcy in Alabama? We are doing that because some aspects are specific to Alabama, while others are more national-oriented. You can get more details about nation-oriented in one of our articles titled Chapter 13 bankruptcy.  

We will soon look at Alabama-specific aspects, but first, let’s understand what the differences between a Chapter 13 bankruptcy and a Chapter 7 bankruptcy.

Comparing Chapter 13 to Chapter 7 in Alabama

Chapter 13 Bankruptcy: This kind of bankruptcy is also known as the ‘wage earners bankruptcy.’ It is a voluntary reorganization of debts as defined by the IRS. Debtors take responsibility for the debt via an installment repayment plan that runs anything from three to five years. Mostly, lawyers come in handy in these procedures. So, why is Chapter 13 so popular with debtors? The main reason is that most of them could be having a high income that disqualifies them from filing for Chapter 7 bankruptcy. Additionally, they might possess valuable property or assets. It is vital to note that the payment is monthly.

Chapter 7 Bankruptcy: Also referred to as ‘liquidation bankruptcy.’ This is the most common form of consumer bankruptcy as of the most recent government data in 2019. In this case, debtors are unable to pay their debts; therefore, they try and discharge the debt through a Chapter 7 bankruptcy. As long as you qualify for this bankruptcy, you will find it is less expensive, and you can close after 120 days. Here, we have highlighted a calculator that can assist you in estimating your Chapter 13 payment plan and whether you qualify for Chapter 7. By now, we are confident that you know the difference between Chapter 7 and Chapter 13, so we can delve deeper into Chapter 13 bankruptcy in Alabama.

Here, we will look at the following:

  • Chapter 13 Bankruptcy Plan Payment in Alabama
  • Alabama Bankruptcy Exemptions
  • Chapter 13 Bankruptcy Alabama Trustees
  • Alabama Bankruptcy Districts and Court Locations
  • Should I File a Chapter 13 Bankruptcy in Alabama?

Chapter 13 Bankruptcy Plan Payment in Alabama

The first and most crucial step would be to approximate your Chapter 13 payment arrangement. The Chapter 13 bankruptcy Alabama plan payment estimate shown here factors in the IRS National expense figures plus Alabama-specific expenditures such as the Alabama administrative expense multiplier, and the ­­­­Alabama bankruptcy allowable living expenses.

Lots of folks are keen to find out if they qualify for Chapter 13, and in the event they file for it, what would be their Chapter 13 payment arrangement? You will find it difficult to estimate a precise Chapter 13 bankruptcy plan payment by yourself as there are complex bankruptcy forms to be filled. For this very reason, we designed the calculator to provide insight into whether you qualify for Chapter 7. Also, another reason for the calculator is to provide an estimated payment plan if you opt for Chapter 13 bankruptcy.

 How Does the Chapter 13 Calculator Operate?

· The Rough Estimate Calculator: it takes a short duration, but it doesn’t give a full picture, so you are advised to go with the more detailed calculator.

· More Precise Estimate Calculator: with this calculator, you will have access to our more precise calculators. It is vital to note that the numbers given here are approximated, and in case you need specific figures, it is recommended that you consult an experienced attorney.

Alabama Means Testing

The calculator illustrated above uses  Alabama means testing data found here to estimate whether you qualify for Chapter 7. The information for the Alabama Means Test for cases filed on or after May 1, 2020. This information is also included in the table shown below. Please keep in mind that each person after nine people is $9,000.

# of PeopleAnnual Income
1$48,544
2$56,918
3$68,554
4$82,991
5$91,991
6$100,991
7$109,991
8$118,991
9$127,991

Alabama Bankruptcy Exemptions

Before filing for Chapter 13, it is essential to know if you possess any assets that are above the exemptions. Despite qualifying for Chapter 7, owning a significant equity position in assets makes a Chapter 13 or debt settlement more suitable options for you.

When filing for bankruptcy, you should remember that Alabama has bankruptcy exemptions and specific statutes that should be considered. If you possess assets that are valuable than the Alabama exemptions, they can face liquidation. We have incorporated the full list of  Alabama Bankruptcy exemptions.

Chapter 13 Bankruptcy Alabama Trustees

The responsibility of the trustee is to regulate the bankruptcy proceedings and also to liquidate the debtor’s nonexempt assets. Chapter 7 trustees are plenty in number, but there are not many Chapter 13 trustees. Here is a list of  Chapter 13 bankruptcy trustees in Alabama.

DistrictNamePhone
EasternJoyce B. Babin(501) 537-2500
EasternJack W. Gooding(501) 537-4400
EasternMark T. McCarty(501) 801-5600
WesternJoyce B. Babin(501) 537-2500
WesternJack W. Gooding(501) 537-4400
WesternMark T. McCarty(501) 801-5600

Alabama Court Locations and Bankruptcy Districts

Alabama has three bankruptcy districts: Northern, Middle and Southern. So, when you want to file for Chapter 13 bankruptcy in Alabama, where is the precise address that you’ll go to? Let’s go through the details.

First, we found the map below from Debt Stoppers to be helpful to show which county is attributed to which bankruptcy district. If you are in Jackson County, it may be obvious that you are in the Northern District, but it may be less obvious if you are in Sumter County.

Next, let’s look at the court websites to see the court locations:

 Should I Go Ahead with a Chapter 13 Bankruptcy in Alabama?

If debts swamp you, then a Chapter 13 bankruptcy in Alabama is a great and legitimate option. You can also opt for this bankruptcy if you are not eligible, or you don’t fancy a Chapter 7 bankruptcy. Bankruptcy aside, alternative choices include debt management and debt settlement.

It is highly advisable to consider the pros and cons before making up your mind. Our Chapter 13 calculator will compare the options on the table and provide the pros and cons. You are free to conduct your own research regarding the alternatives given or use the calculator. Debt can bring about tremendous stress, so we sincerely hope that this article has helped assist you on your way to freedom from debt.

Post Author: Ben Tejes

Ben Tejes is a co-founder and CEO of Ascend Finance. Before Ascend, Ben held various executive roles at personal finance companies. Ben specializes in Chapter 13 Bankruptcy, Debt Settlement, Chapter 7 Bankruptcy and debt payoff methods. In his free time, Ben enjoys spending time going on adventures with his wife and three young daughters.

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