Jordan Law Firm 205-327-5551

We are a debt relief agency. We help people file for debt relief under the Bankruptcy Code.


Bankruptcy FAQs

What is a Chapter 7 bankruptcy?
What is a Chapter 13 bankruptcy?
Will a bankruptcy stop a garnishment that is already being deducted from my paycheck?
Do I qualify to file a Chapter 7 bankruptcy in Alabama under the “new” bankruptcy laws?
How does the “Means Test” work?
Can I file bankruptcy on payday loans or check cashing loans?
Can I be charged with a crime or go to jail for not paying a payday loan or a check cashing loan?


What is a Chapter 7 bankruptcy?
Chapter 7 bankruptcy (also known as straight bankruptcy) allows a debtor to exempt certain property and have certain debts discharged (forgiven without payment). Most taxes, student loans and domestic obligations (child support and alimony) are not eligible for discharge. Most other consumer debts (credit cards, medical bills and loans) are dischargeable. Return to top of page
What is a Chapter 13 bankruptcy?
Chapter 13 (also known as debtor’s court) is often filed by people attempting to stop foreclosures, garnishments and repossessions. Chapter 13 allows a debtor to place debts into a court approved plan that permits individuals to keep their property by repaying creditors out of their future income. It is not available to corporations or partnerships. After completion of payments under the plan, chapter 13 debtors receive a discharge of most debts. Return to top of page
Will a bankruptcy stop a garnishment that is already being deducted from my paycheck?
YES. Under most circumstances, both Chapter 7 and Chapter 13 bankruptcy filings will stop garnishments. In instances where your pay check is being garnished, we can file an action in state court and have the garnishment stopped and in some cases get some of the money garnished back. Please note that a bankruptcy will not stop a garnishment or income withholding order related to child support or alimony. Return to top of page
Do I qualify to file a Chapter 7 bankruptcy in Alabama under the “new” bankruptcy laws?
It depends. You must undergo the “Means Test” to determine whether you qualify. To determine whether you qualify, I will need a detailed picture of your financial situation. Give us a call and we can assist you in the process. Return to top of page
How does the “Means Test” work?
First you see if you are over or under the median income for a family of your size in Alabama. For a quick check click here. If your household income is under the median income for the same size household in Alabama, then you have passed the “Means Test” and qualify to file a Chapter 7.

If you are over the median income, it DOES NOT mean you are disqualified from filing a Chapter 7 bankruptcy. Most people can still file. There is just more paperwork to do. With the additional paperwork you are allowed to deduct taxes, housing costs, transportation costs, secured debt payments, medical costs, and many other costs. After deducting these costs, most people have very little income that could be used to pay unsecured creditors; and therefore, can file a Chapter 7 bankruptcy. Give us a call. Return to top of page
Can I file bankruptcy on payday loans or check cashing loans?
YES. You can file bankruptcy on payday and check cashing loans and these loans are dischargeable. Return to top of page
Can I be charged with a crime or go to jail for not paying a payday loan or a check cashing loan?
NO, the crime of writing a bad check is a form of fraud, i.e. saying you have enough money in the bank to cover the check at the time of writing it. This fraud has to be relied on by the person receiving the check. In the payday and check cashing loan situation, these companies know the check is not good at the time they accept it; therefore, there is no fraud and there is no crime. Give us a call. Return to top of page