What is bankruptcy?

Bankruptcy is a mechanism that goes back to biblical times, where God commands that there is to be a release by creditors every seven years. There are an innumerable number of situations and scenarios in which bankruptcy relief allows individuals recovery from misfortune and poor decisions. Today, there are many circumstances that people find themselves in where filing for bankruptcy is of particular benefit.

Bankruptcy is a legal proceeding in which the individual declares to the court and their creditors that they are unable to meet their financial obligations. Whether it be due to loss of income, an unexpected injury or medical hospitalization, or from unforeseen expenses, bankruptcy is a powerful tool available to the individual. There are several different types of bankruptcy relief available. The most widely used types of bankruptcy under the Bankruptcy Code are Chapter 7 and Chapter 13.

In addition to the above broad outline, bankruptcy can be of particular benefit to those facing foreclosure, auto repossession, wage and bank garnishment, or medical bills.

What is the difference between Chapter 13 and Chapter 7 bankruptcy?

There are generally two types of personal bankruptcy. Title 11 of the United States Bankruptcy Code is broken down into Chapters – Chapter 7 and Chapter 13. Chapter 7 of the code outlines complete liquidation of a person’s debts. Chapter 13 discharges remaining debt after the individual completes a payment plan.

Chapter 13 bankruptcy helps those that have a steady income, but they do not have enough income to pay all their debts. Chapter 13 may save you from losing your house, cars, or other valuable items. It is similar to a payment plan through the court system. Once the payment plan is completed, the remaining debt is forgiven or discharged.

Chapter 7, often called straight bankruptcy, is the second type of bankruptcy filed by individuals. Chapter 7 eliminates most unsecured debt including credit cards, medical bills, and personal loans. However, it does not eliminate student loan debt, child support debt, back taxes, and several other types of debt. Whereas a Chapter 13 will take several years to complete, individuals filing a Chapter 7 typically receive their discharge within 6 months time from filing.

Call today to discuss your financial options with an experienced bankruptcy attorney by scheduling a free consultation at 205-286-8111.

Chapter 13 Bankruptcy

Chapter 13, also called debtor’s court, is a type of bankruptcy in which you repay your creditors some portion of what they are owed over a fixed period of time, usually between three and five years. Chapter 13 was designed for the wage earner to repay creditors what they could reasonably pay over a period of time, with the remainder of their debts to be generally discharged, or forgiven. This is usually a better option for those who have fallen behind on a mortgage or car which they wish to keep.

While this is not an option for everybody, it is a useful tool for those who are facing a foreclosure and wish to keep their home. Since the housing bubble burst in 2007 coupled with the financial crisis which began in 2008, many homeowners find themselves underwater or struggling to decide which bills to pay and which ones can wait another week. Filing a Chapter 13 bankruptcy can allow you to stop a foreclosure, give you time to repay a reasonable amount of debt to your creditors, and regain control over your financial world.

There are several other significant advantages of a Chapter 13 bankruptcy as well. One is that you may, under certain circumstances, be able to pay for a vehicle at a reduced rate of interest or even less than the principal owed on the vehicle. While this area of the law can be complex, you should discuss these possibilities with the Elmer Law Firm to find out what may be accomplished.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is another type of bankrupty, one in which most debts are discharged outright without making monthly payments through the Bankruptcy Court. While Chapter 7 is a tool available to most individuals, it does not address several different types of debt. A Chapter 7 will not discharge certain debts including the following:

  • Domestic support obligations (e.x. child support, alimony, spousal support)
  • Taxes owed (generally those incurred within the last three tax years)
  • Student Loans
  • Debts arising from fraud, criminal charges, fines and penalties imposed
    by a court

With Chapter 7, most people get to exempt, or keep, all of their property. While bankruptcy law allows only a certain amount of property to be exempt, for most people this does not present a problem. However, when you first meet with the Elmer Law Firm, an experienced attorney will explain how your property would be impacted in a Chapter 7 bankruptcy.

For many people, the most worrying aspect of Chapter 7 is whether they qualify or not. In 2005, Congress passed an Amendment to the Bankruptcy Code by adding a ‘means test.’ In order to file a Chapter 7, you must fall under the median household income for the State of Alabama. For those whose income is above the median but filing a Chapter 7 would be the most beneficial, call to schedule a free consultation with the Elmer Law Firm to further look into your financial situation to determine whether you qualify.


If you own your home and are one of the millions of Americans who have fallen behind on their mortgage payments, you may be facing the devastating reality of a looming foreclosure. With falling incomes, shrinking home values, mounting debts and rising prices, far too many families in Alabama and across the country have had to face the tough decision of which bills to pay and which to let slide another month. If you have missed even a few monthly mortgage payments, your lender or servicer may have already sent you threatening letters of possible foreclosure. You may have even received the actual notice of foreclosure and been contacted by an attorney.

The good news is that you are not alone, and there is a solution. You do not have to lose the home you have worked so hard to build and maintain for your family. By scheduling a free initial consultation with the Elmer Law Firm, we will find out exactly what your options are and which avenue would be best. By filing a Chapter 13 bankruptcy, you can prevent the pending foreclosure, no matter what stage of that process you are in, and catch up the amount that you are behind.

The important thing is to act quickly and call us at 205-286-8111 so we can do our job to fix the situation.

Auto Repossession

Your vehicle is one of the most important things that you own. It allows you to get to work, drive the kids to school and do all the other important things in our lives. It allows you to live your life!

Unfortunately, vehicles are also some of the most expensive things that we own. In these troubled economic times, it is easy to fall behind on car payments. While lenders treat the situation differently and give you different grace periods, at some point the lender will look to repossess the vehicle as they are allowed to do under Alabama law. If repossessed, they will then sell the vehicle and come after you for the difference you still owe.

Do not allow your situation to get out of hand. Call today to schedule your free initial consultation so we can discuss how to save your vehicle from repossession. Just because you have missed a few payments does not mean you have to lose it. By filing a Chapter 13 bankruptcy, you can prevent the repossession and often times pay less than you owe under the contract for the vehicle.

Wage and Bank Garnishment

When we fall behind on a debt owed to a creditor, if that situation is not dealt with, it will eventually end with you being sued by the creditor or a collection company. Often times, when we receive service of a lawsuit, the debt is many years old. You may not even remember having incurred the debt in the first place. But if you do not fight the lawsuit in state court, the lawsuit will turn into a garnishment of your bank account, your pay check, or even a lien on your home or other property.

Before you get to this stage of losing your hard earned money to a debt collector, call the Elmer Law Firm so we can discuss your options and stop the litigation before this happens. We can often times stop the garnishment before it happens, or even get back money that has already been garnished by filing a bankruptcy.

Most important of all is that you have to act quickly before the damage is done.

Call us today at 205-286-8111 so we can help prevent your wages from being garnished.

Medical Bills

There are many things in life that are beyond our control, and our health is one of them. While medical treatment in the United States has progressed to allow for miraculous healing and treatment of our illnesses, it is also expensive. While we are very grateful to the medical personnel who treat us, we will always receive a bill from the facility for their services. If you have benefited from extensive treatment or cutting edge technology and practices, your bills could easily run into the hundreds of thousands of dollars, depending on your medical insurance coverage if applicable.

If you have received medical care which has cost you more than your income can bear, call today at 205-286-8111 to schedule your free initial consultation. We can look at your bills and your overall financial picture to see what is your best route.

kenneth elmer

Call today



Tuscaloosa Office

1927 7th Street, Tuscaloosa, AL, 35401

Jasper Office

1906 Delaware Avenue, Jasper, AL, 35501

Contact Today

Get real help now from an expert local bankruptcy lawyer

elmer law firm