Process for Chapter Seven Bankruptcy in Alabama
- 1). Obtain credit counseling with a federally-approved credit counselor in Alabama. You can find a list of approved counselors on the website for the U.S. Department of Justice. Federal law requires you to have credit counseling within the 180-day period prior to filing for bankruptcy.
- 2). Check with one of the bankruptcy courts in Alabama to find out which court serves your area. There are three districts in Alabama: Northern, Southern and Middle. Any of the bankruptcy courts can tell you which court you need to work with.
- 3). Download a Chapter 7 bankruptcy package from the web site for your bankruptcy court. For Chapter 7 bankruptcy, you need a Voluntary Petition, Schedules A through J, a Notice to Consumer Debtors, Statement of Financial Affairs, Statement of Social Security Numbers, Statement of Intention, Statement of Current Monthly Income and Means Test Calculation, Statement of Intention, Disclosure Statement of Bankruptcy Petition Preparer and Summary of Schedules and Statistical Summary of Certain Liabilities.
- 4). Complete the voluntary petition. If you are filing jointly, provide contact and financial information about your spouse on the petition. Put only the last four digits of you and your spouse's Social Security numbers on the petition and put the complete Social Security numbers on the Statement of Social Security Numbers. Indicate that you are filing for Chapter 7 rather than Chapter 13 by checking the correct box. Check off the box for Exhibit D and attach Exhibit D paperwork proving that you completed credit counseling. Sign and date the petition.
- 5). Complete Schedules A through J. You must report your income, assets and debts on these schedules. If you intend to keep your house or car, claim exemptions for them on Schedule C. You may claim an exemption for your home if you have less than $5,000 worth of equity in it as of 2010. You must use a wild card exemption to keep your car.
- 6). Complete the Statement of Financial Affairs. All debtors must answer questions 1 through 18. If you own a business, answer question 19 through 25 as well. Answer questions honestly. Your answers must be consistent with financial information reported on your petition.
- 7). Calculate your monthly income and pass the means test using the Monthly Income and Means Test Calculation form. To qualify for Chapter 7 bankruptcy in Alabama, you must make less than the median income, which as of 2010 is between $38,018 and $62,983 depending upon the size of your family. After you have passed the means test, complete the Statement of Intention. Report all property you own and whether you intend to keep, surrender or sell the property.
- 8). Enroll in and complete an approved financial management class. You can find approved classes in Alabama on the Department of Justice's website. Attach your proof of completion to your bankruptcy petition and schedules.
- 9). Create a matrix of creditors by listing each creditor and its contact information. Double space between creditors.
- 10
Sign the Notice to Consumer Debtors and Disclosure Statement of Bankruptcy Petition Preparer. Make copies of all the bankruptcy forms you have filled out. - 11
File the forms at the proper bankruptcy court and pay the filing fee. As of 2010, the filing fee is $299. Keep the copies for your records. - 12
Check your mail for your notice to creditors. You will receive notice of your meeting of creditors and your assignment of a bankruptcy trustee with this notice. Send a copy of your last tax return and last three pay stubs to your bankruptcy trustee as soon as you get the notice. If you are self-employed, send copies of your income and expenses for your last three months. You must also provide this information to any creditor who asks for it. Dispose of any property you agreed to surrender or sell while you are waiting for your meeting date. - 13
Attend your meeting on the appointed day and time. Bring your photo ID and Social Security card with you. If you and your spouse filed jointly, you must both attend the meeting. Answer any questions your bankruptcy trustee poses. - 14
Receive your notice discharging your debts in the mail two to three weeks after your meeting with creditors.
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