Filing bankruptcy in the State of Alabama requires you to first determine which district you reside in. There is a Northern District, Middle District and Southern District of Alabama U.S. Bankruptcy Court. Federal bankruptcy courts offer Chapter 7, 9, 11, 12 13 and 15 bankruptcies, each of which serves a different purpose.
Types of Bankruptcy and Terms
Chapter 7 bankruptcy allows for liquidation of assets to cover debts. Chapter 11 allows for reorganization of debt for businesses who wish to stay in business. Chapter 13 permits individual debt adjustment, which may be a combination of reducing debt and extending time to repay it, and Chapter 12 is family farmer or family fisherman bankruptcy.
A debt may be discharged in a bankruptcy by order of the court, legally freeing the debtor from any responsibility of paying the debt and preventing the creditor from continuing with any collection activity.
Creditors can refuse a discharge in chapter 7 cases. Courts can also refuse to grant a Chapter 7 bankruptcy discharge if the debtor does not complete a personal financial management course, fails to provide the correct financial information and documents, submits fraudulent information or violates court orders.
Chapter 12 and 13 bankruptcies usually require payment plans on debts before they can be discharged. Debtors seeking a chapter 13 are also required to complete a personal financial management course. Creditors cannot object to discharging a debt in chapter 12 and 13 bankruptcies, but they can refuse to confirm a submitted repayment plan.
Steps to Filing Bankruptcy
Prior to filing bankruptcy, debtors must first attend an approved credit counseling service. The next step to filing bankruptcy in the state of Alabama is to submit a petition to the court for either chapter 7, 11, 12 or 13. You then must file schedules, a statement of financial affairs and statement of monthly income/means test (forms B122A and/or B122C) within 14 days to the court. Chapter 12 cases must file a plan or submit a motion to extend within 90 days after the petition filing or risk case dismissal. Chapter 13 cases must submit a chapter 13 plan within 14 days.
Regardless of the type of bankruptcy you are filing, a meeting of creditors will be scheduled by the court, which you must attend. Tax returns will be due to the court 7 days before the scheduled meeting of creditors.
Filing fees must also be paid to the court. In some chapter 7 cases, a petition may be filed to waive these fees. Debtors may also apply for payment plans. Current fees are as follows: $335 for Chapter 7, $1,717 for Chapter 11, $275 for Chapter 12 and $310 for Chapter 13.
In order to complete a bankruptcy, an approved debtor education class must also be attended by the debtor.
Location Specific Information
The Northern District of Alabama U.S. Bankruptcy Court has four division locations: Anniston, Decatur, Birmingham and Tuscaloosa. Counties included in the Northern District include: Marshall, De Kalb, Etowah, Cherokee, St. Clair, Calhoun, Talladega, Cleburne, Clay, Lauderdale, Colbert, Franklin, Limestone, Lawrence, Winston, Madison, Morgan, Cullman, Jackson, Blount, Jefferson, Shelby, Marion, Winston, Lamar, Fayette, Walker, Pickens, Tuscaloosa, Bibb, Greene and Sumter.
The Middle District has court locations in Montgomery, Opelika and Dothan. This district's counties are Coffee, Dale, Geneva, Henry, Houston, Chambers, Lee, Macon, Randolph, Russell, Tallapoosa, Autauga, Barbour, Bullock, Butler, Chilton, Coosa, Covington, Crenshaw, Elmore, Lowndes, Montgomery and Pike.
The Southern District has court locations in Mobile and Selma, and includes the following counties: Hale, Perry, Dallas, Marengo, Wilcox, Choctaw, Clarke, Washington, Mobile, Baldwin, Monroe, Conecuh and Escambia.