The Sheriff’s Sale

Thinking about filing for bankruptcy protection is a difficult consideration for most people. However, there are times when it just makes sense. One of those times may be when faced with the prospect of a garnishment or sheriff’s sale of real or personal property.

At The Sellers Law Firm, our Montgomery bankruptcy lawyers and Selma bankruptcy lawyers are experienced in handling the ins and outs of dealing with potential sheriff sales. In order to understand how a Chapter 13 or Chapter 7 could impact a potential sheriff’s sale, first you should understand how a creditor came to have the authority to request the sale of an individual’s personal or real property.

In order to request a sheriff’s sale a creditor first must file a lawsuit against you in an Alabama District or Circuit Court or a trial court from another state. The process for a lawsuit requires the creditor to file a suit in the county in which you reside or in the county in which the agreement with the creditor was entered. If you travel to a county outside of your county of residence to borrow money, then the creditor can file the suit in that county. The suit must include the details of original deal where the creditor loaned or provided money to you and an allegation that you have not fulfilled your side of that agreement, this document is called the claim in the lawsuit. The claim must be served on you personally, by certified mail, or in a few rare circumstances by publication. Once served then you may either respond or not. If you don’t respond, then the court may issue a default judgment. If you do respond, then you can admit to the allegations in the claim or dispute some aspect of the claim allegations. If you admit to the allegations, then the Court can issue a judgment against you in favor of the creditor. If you dispute some element of the allegations in the claim, then eventually the Court will set the matter for a trial and at the trial may determine the truth or falsehood of the creditor’s allegations. The Court’s decision after a trial can be considered a judgment and may be in your favor or in favor of the creditor. If in the creditors favor, then there will be a stated amount which the Court considers you as owing the creditor. If the judgment is not appealed, then the judgment becomes final after a certain period of time depending on the Court. Once the judgment becomes final then the creditor may take additional steps to collect the amount that the court has determined that you owe to the creditor.

First the creditor must have the judgment recorded in the Probate Court in the county in which you reside. Once recorded then the creditor can take steps to collect the monies owned through a garnishment, or execution on real or personal property. The execution is where the County’s sheriff may get involved in collecting the debt for the creditor. The creditor may ask the court to collect real or personal property to sell and then pay off the amount owed to the creditor. But like the lawsuit the execution process has certain technical requirements for the execution to be valid.

For an execution to be valid, the creditor must file a writ of execution to the clerk of court describing the property to be executed upon and the last known address of the debtor. Clerk must also prepare and issue a notice of the right to claim certain property as exempt from execution. In a Chapter 13 or Chapter 7 bankruptcy, Alabama law allows a debtor to exempt up to $8,225.00 in personal property or $16,450.00 on real property, per debtor. This means that if you own a home, that you live in, worth $16,450.00 then you could exempt that property from being sold by the sheriff on an execution. Likewise, if the value of your personal property is less than $8,225.00 then you can exempt that property as well. However, if your personal property consisting of furniture, electronics, clothing, and other personal property is valued at $8,225.00 and you also own a car valued at $10,000.00, with no debt on the car, then the sheriff may seize the car and sell it to pay the amounts owed to your creditor. If the debt to creditor is only $5,000.00 then any amounts over that collected by the Sheriff would be returned to you. How does this play into bankruptcy? Well if you get a notice of execution then the sheriff must wait 5 days for your exemption paperwork. If during those five days, you file for bankruptcy protection then the Automatic Stay would prevent the sheriff from completing the execution process while the Stay is in effect.

Call or text the experienced Montgomery bankruptcy lawyers and Selma bankruptcy lawyers at The Sellers Law Firm today at 334-LAWYERS (334-529-9377). Consultations are always free, and we can usually meet with you within 24 hours! We have an office near you with four locations throughout central Alabama in Montgomery, Selma, Greenville, and Troy. You may also contact us by email at bsellers@sellerslawfirm.com, use the or the Contact Form on our website. Remember that doing nothing, changes nothing!