Please note that we don't operate in Alabama yet but look forward to expanding into your state. You're welcome to keep reading - our content is free for anyone looking to learn more about bankruptcy & filing without a lawyer.
Written by the Upsolve Team.
Updated September 30, 2020
Who wants to file bankruptcy? No one! Sometimes, however, it’s the best and most responsible course of action someone can take. The need to file bankruptcy rarely comes up quickly and often is a combination of things. A job could be lost. Sickness could create huge debt issues. Sometimes it comes down to just bad luck. Regardless of what led you here, Upsolve is here to help you find your path to debt relief. Folks filing bankruptcy in Huntsville have to submit their paperwork to the Bankruptcy Court in Decatur. Decatur is in the Northern District of Alabama, in its Northern Division. That may seem like too much information, but any documents coming from the Court will show that information.
Keep in mind, you’re not alone in having to make this difficult decision. Abraham Lincoln filed bankruptcy after some bad business decisions. Johnny Unitas, widely recognized as one of the best NFL quarterbacks, had to file bankruptcy as well. If you have mortgage problems or you are behind on a car you want to keep, Chapter 13 might be a better choice than Chapter 7. The difference between Chapter 7 and Chapter 13 is huge. Chapter 7 is a liquidation that is typically over in a few months, while Chapter 13 can last from three to five years. If Chapter 7 bankruptcy in Huntsville is what you believe is right for you, Upsolve is here to provide free help. If you wish to pursue free legal aid in your community you can review legal aid options. So, be encouraged! There is light at the end of the tunnel and help available! You will get this present difficulty behind you, and hopefully, be in better financial condition going forward.
Huntsville Bankruptcy Lawyers - Estimated Cost
Some folks find that hiring an attorney can be a bit overwhelming. It does not have to be. A good, local attorney can be a huge help if you need to seek one out. Cost is always something you need to consider, but keep in mind that cheaper is not always better. The cost of a bankruptcy lawyer will be money well spent if you have a case that’s not completely straightforward. Huntsville bankruptcy lawyer cost will vary quite a bit. A good estimate can range from $700 to $1800 for a Chapter 7 bankruptcy in Huntsville. Many attorneys offer a free consultation. Free is good, as all you’re investing is time and in return, you’ll learn more about your options and the different types of bankruptcy relief available to you. Just make sure you know what the total fees are expected to be before you leave the lawyer’s office, so you can make an informed decision on how to move forward.
How to File Bankruptcy in Huntsville, Alabama for Free
If you will follow the steps listed below, the process of filing bankruptcy in Huntsville will go much smoother. Most folks find a breakdown of the steps outlining how to file bankruptcy in Huntsville very helpful as they move through them.
Collect Your Huntsville Bankruptcy Documents
When filing bankruptcy in Huntsville, be sure to get your tax returns for the prior two years. If you have a copy of each, great! If you don’t, and you filed online, hopefully you can download a copy. If you used a tax preparer such as H&R Block, they should be able to give you copies. The last resort tis to go online and order transcripts from the Internal Revenue Service. The IRS now has a redacted transcript that they will issue. The redacted form means no personal identification information is included. This is to prevent your personal information from falling into the wrong hands. When you file your Alabama bankruptcy you should make sure you have six months of bank statements for any account you’re on, even if it’s been recently closed. The six months is going back from the date you actually file bankruptcy. The same period (6 months) of pay stubs is also needed. Most employers can provide those to you. Some use a payroll service; but you should still be able to request them. Any car titles for vehicles owned free and clear would be helpful as well as a recent copy of your credit report.
Take Credit Counseling
Filing bankruptcy in Huntsville requires you to take two different courses. The first one you will take is called credit counseling. The purpose of the course is to help folks understand their options for how to deal with their debt, both in and out of bankruptcy. When filing bankruptcy in Huntsville, it’s essential to use an approved credit counseling provider. The providers for credit counseling are approved by the Bankruptcy Administrator for the state of Alabama. The Alabama Bankruptcy Court will require you to file a certificate of completion confirming you finished the course. You’ll get this certificate directly from the provider after you’ve completed it.
Complete the Bankruptcy Forms
The number one requirement for completing your forms for your Alabama bankruptcy is the need to provide complete information. Leaving out information can result in having your bankruptcy discharge denied or even revoked. The discharge is why you’re filing bankruptcy in Huntsville in the first place. It’s the document that shows your debts are gone. Disclose everything. List anything, and everything, that is owned by you. It would be helpful to have a list of everyone you owe money to, and their addresses and account numbers. Be very careful to list all of your income and expenses. One error some folks make is to leave out cash expenses. If you usually pay for something with cash, make sure you account for that in the forms you’re preparing for your Chapter 7 bankruptcy in Huntsville.
Get Your Filing Fee
The fee for your Chapter 7 bankruptcy in Huntsville is $335. The number of people in your household does not matter. It’s the same fee whether you’re filing bankruptcy by yourself or with your spouse. If you are able to pay the entire fee up front, you should. You can ask for a waiver of the filing fee if your income is less than 150% of the federal poverty guidelines. The Court will approve the request if it finds that you can’t make payments after filing bankruptcy once you’re protected from your creditors by the automatic stay. Or, the Court may require you to make installment payments. If you simply can’t pay the full fee at the time your Alabama bankruptcy case is filed, you canask the Court to pay it installments instead. Just make sure to note all payment due dates and be prepared to pay at least a quarter of the total fee (so about $85) within 30 days of filing your case.
Print Your Bankruptcy Forms
Many folks in your situation find it helpful to have at least two sets of forms with them when they go to Court to file their case. If you have your own printer, or access to a printer through a friend of family member, good. If not, you can usually visit a public libraryto have your bankruptcy printed for a small fee. Your Alabama bankruptcy documents can also be printed off at an office supply store. Filing bankruptcy in Huntsville is not difficult, but one rule when printing off your forms is never print on both sides. The Clerk of Court will not accept them if you do. Other than that, everything is printed in black and white on regular, 8.5” x 11” paper.
Go to Court to File Your Forms
You will file your Huntsville bankruptcy forms in Decatur. You can mail them in, but folks who do that sometimes regret it. If you missed a signature page, you may get them back in the mail, which can delay your case. It’s best to hand deliver them if you are able. First, you have to go through security as you enter the building. There will be a metal detector there. It’s for your protection, as well as everyone else. We would suggest you not wear shorts and flip flops. You will probably find people are more courteous if they believe you are serious about what you are doing when you file your Alabama bankruptcy. Get one set of forms date and time stamped that you can keep for yourself. It is not required, but it could come in handy if some collector shows up after you filed but before their company received notice about your filing from the Court.
Mail Documents to Your Trustee
Filing a Chapter 7 bankruptcy in Huntsville will require you to provide documents to your bankruptcy Trustee before going to Court. The Trustee is an individual who serves on a panel of people who oversee the Alabama bankruptcy cases under Chapter 7. They receive a fee to conduct a 341 meeting, which you will attend roughly 4 to 6 weeks after filing your forms. The Trustee will want to review your tax returns, pay stubs, and, more often than not, your bank statements. You will receive a letter from the Trustee giving you the address or email address that they use to receive documents. You need to get everything they request to them within the time they specify.
Take Bankruptcy Course 2
As with the first course, the debtor education course is required to be taken from an approved provider. You can only take this course after you file your Alabama bankruptcy. The Bankruptcy Administrator’s website will give you a complete list of approved debtor education providers. This course can be done online or over the phone. We recommend that you use the same provider you used for the first course as long as they are approved to offer the second course, assuming you were satisfied with them. This course is centered around budgeting to help you prepare for life after bankruptcy. Most folks find it helpful, if a bit long. Leave enough time to do it in one sitting. Also, try to take it within 45 days of the date your 341 meeting is set to take place in your Huntsville bankruptcy.
Attend Your 341 Meeting
When you file your Chapter 7 bankruptcy in Huntsville you may attend your 341 meeting at the Bankruptcy Court in Decatur, where you filed, or it may be somewhere else. You need to read the Notice of Bankruptcy Case you receive shortly after filing bankruptcy in Huntsville to find out the location of your 341 meeting. It’s important to always open any mail from your Trustee or from the Court. Since some hearings are conducted at other sites it is vital that you show up at the right place. It may take a while for your case to be called, and it would be good to arrive a little early. It can be somewhat comforting to listen to a few hearings before you have your own. The typical hearing for folks in your situation will only last 5 to 10 minutes. Be certain to take your driver’s license and proof of social security. Your Huntsville bankruptcy could be rescheduled if you don’t have proper ID.
Dealing with Your Car
When you file your Chapter 7 bankruptcy in Huntsville, you will be able to decide what to do with your car and car loan. To keep the car, you will need to sign so-called reaffirmation agreementconfirming you will keep the car and continue to pay according to the original agreement. The upside is keeping the car. The downside is if you fall behind on your payments, the car can be repossessed, and you can be sued for any balance. Second, you can redeem the car, which makes sense if you owe a lot more than what it’s worth. A redemption allows you to purchase the car at its book value. The downside is that a lot of people filing bankruptcy in Huntsville have to take out a redemption loan which can have a pretty high interest rate. In your Alabama bankruptcy you can also choose to simply surrender the vehicle and walk away. Often times, that may be the best decision. Buy an old car and get what you really want somewhere down the road.
Alabama Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Huntsville
Alabama Means Test
Congress amended the Bankruptcy Code in 2005 and added the Means Test to prevent high income people from filing Chapter 7 bankruptcy. The Alabama bankruptcy Means Test first compares your income to the median household income for the state. If you make less than the median, you qualify for a Chapter 7 bankruptcy in Huntsville. If you don’t, you may still pass the Alabama bankruptcy Means Test after comparing your income to allowed expenses.
Median Income Levels for Alabama
Alabama Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Alabama
Alabama Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Alabama Bankruptcy Forms
Alabama bankruptcy forms include the bankruptcy petition, schedules A-J, and a number of different statements. They are not different from those used elsewhere. There are some local forms used in a Huntsville bankruptcy, but they deal with attorney compensation limits and creditor forms that will not likely have an impact in a simple Chapter 7 case.
The purpose of exemptions is to tell folks what they can keep if they choose to file a Chapter 7 bankruptcy in Huntsville. They differ from state to state and there is a set of federal bankruptcy exemptions in the Bankruptcy Code. If you’ve lived in the state for at least two years when filing bankruptcy in Huntsville, you’ll have to use the Alabama bankruptcy exemptions.