A debt collector called me and said “We will garnish your next paycheck.” Can they do this?
Can a bankruptcy stop my house from being foreclosed on in Alabama?

Why can’t I just put my house, car or other property in someone else’s name before I file for bankruptcy?

Because it would be a huge mistake.  The bankruptcy court trustee has the power to avoid such transfers he or she feels were made with the intent to hinder, delay, or defraud creditors.  Under the amended bankruptcy laws the trustee can “look back” at least two years, but may “look back” even longer in some circumstances.  The trustees for the Northern District of Alabama routinely ask about real property transfers in the past ten years.  Do not worry if you have legitimately (that is transferred to a third party and receipt of fair market value) sold a house or vehicle; however, be prepared to present the paperwork for the transaction.

The consequences of getting caught attempting a “fraudulent transfer” can be severe.  The trustee’s avoidance of the transfer itself may cause a debtor many new legal problems; including, but not limited to, issues with the person(s) or entity to which the property was transferred and/or possible criminal charges.  In addition such a transfer may result in a debtor not receiving a discharge in his or her bankruptcy which means no protection from creditors.

So, what do you do if you have too much equity in your real or personal property?  You probably will be able to file a Chapter 13 Bankruptcy.  In a Chapter 13 Bankruptcy in Alabama you may pay some or all of this equity into the bankruptcy court in affordable monthly payments over a period of time.  While you may have to pay some money into the court, you will still avoid lawsuits, garnishments, repossessions, foreclosures, and have the other protections provided by the bankruptcy laws.


If you have any questions regarding this or Alabama Chapter 13 Bankruptcy filings or other bankruptcy or debt related issues please email me.



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