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And the attorney's fees are much higher in chapter 13s; the court-authorized ?no-look? chapter 13 attorney's fees in Alabama are currently around $4,500. About 70 percent of the bankruptcies filed in Alabama are chapter 13s, compared with about 30 percent nationwide.
Chapter 7 does not involve the filing of a plan of repayment as in chapter 13 and is sometimes referred to as "straight bankruptcy". Instead, a trustee is appointed in the case and sells the debtor's nonexempt assets and uses the proceeds to pay the creditors of the debtor.
Understandably, almost all attorneys thus want to be paid up front to handle a chapter 7 bankruptcy. An informal survey of chapter 7 attorney's fees a few years ago in the Southern District of Alabama showed that fees generally ranged from $800 to $1,500, with an average of about $1,000.
Each state has a different dollar amount as a threshold for qualifying under the means test. In the State of Alabama: If you are single, live alone, and earn less than $39,768 per year ? you automatically qualify under the means test to file for Chapter 7 bankruptcy protection.
Collect Your Alabama Bankruptcy Documents. ... Take a Credit Counseling Course. ... Complete the Bankruptcy Forms. ... Get Your Filing Fee. ... Print Your Bankruptcy Forms. ... File Your Forms With the Alabama Bankruptcy Court. ... Mail Documents to Your Trustee. ... Take a Debtor Education Course.
The Chapter 7 bankruptcy fee is $335. The Chapter 13 bankruptcy filing fee is $310. You also have to pay a private lawyer to handle your case. In a Chapter 7 bankruptcy, you will probably have to pay your lawyer in full in advance.
Filing bankruptcy without an attorney is called "Pro Se" - meaning to represent oneself in legal proceedings. With limited exceptions, Section 109(h) of the Bankruptcy Code requires that all individual debtors receive credit counseling from an approved provider within 180 days before the bankruptcy filing.
In most respects, filing for bankruptcy in Alabama isn't different from filing in another state. The bankruptcy process falls under federal law, not Alabama state law, and works by unwinding the contracts between you and your creditors. That's what gives you a fresh start.