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Is Bankruptcy Right For Me?
What are some common reasons for filing bankruptcy?
When should I consider bankruptcy?
What different types of bankruptcy should I consider?
Why would I choose to file chapter 13 over chapter 7?
How much do creditors receive in a chapter 13 plan?
Who can file bankruptcy?
What property can I keep?
What property is a chapter 7 debtor in North Carolina
allowed to exempt?
What if all of my assets are exempt?
Will bankruptcy wipe out all my debts?
Will bankruptcy stop a wage garnishment or stop a
creditor from taking a judgment
against me?
Will I have to go to court?
What else should I know about bankruptcy?
Is my car on the Repo man's List?
Do
I Have Enough Debt to File Bankruptcy?
Can I stop Bill Collectors from calling
me?
Is Bankruptcy Right For Me?
What is bankruptcy? Bankruptcy is a legal proceeding in which a person
(or a husband and wife) who cannot pay his or her bills can get a new fresh
financial start. The right to file for bankruptcy is authorized by federal
law. Filing bankruptcy immediately stops all of your creditors from calling
you, writing you and seeking to collect debts from you, at least until your
debts are sorted out according to the law. Our bankruptcy lawyers will put a
STOP to phone calls and letters once you file your case.
Bankruptcy may make it possible for you to:
1. Eliminate the legal obligation to pay many, if not most, of your
unsecured debts. This is
called a “discharge” of debts. It is designed to give you a new financial
start. An unsecured creditor is a creditor who does NOT hold a lien on any
of your property. Good examples are credit
card debts or medical bills.
2. Stop foreclosure on your house or mobile home and if you can afford to
keep these items, allow you an opportunity to catch up on missed payments.
3. Prevent repossession of a car or other property, and possibly force the creditor to
return property even after it has been repossessed.
4. Keep and protect property of various types. within available State and
Federal "exemptions". Exemptions are categories of property you are
allowed to keep under the law, even though you have filed bankruptcy.
5. Bankruptcy can also help you keep...and if
need be, catch up on...property serving as collateral with secured creditors. A secured creditor is a
creditor who has the right to use some of your property as collateral for a
loan or other debt.
6. Force certain secured creditors, like your mortgage company or finance company,
to either take more convenient payment plans, or at least allow you more
time to catch up.
7. Stop wage garnishment, debt collection harassment, and similar creditor
actions to collect a debt.
8. Restore or prevent termination of certain types of utility service.
9. Allow you to challenge the claims of creditors who have committed fraud
or who are otherwise trying to collect more than you really owe.
Whether you need to file bankruptcy, or just want answers to all your debt
questions and concerns, we can help. If you are sick of getting pushed around,
feeling angry and upset, and losing sleep, now is the time to do something
about it.
And the best thing is ... you have nothing to lose because the consultation
is FREE. You can contact our lawyers, or visit our offices, get lots of
valuable information, and then leave ... no strings attached ... and it is
perfectly okay with us.
If you find yourself in credit difficulties, your best strategy is to
contact a law firm specializing in consumer credit assistance. Contact an
experienced credit and bankruptcy attorney today - we can discuss your
options, and help you on the way to financial health.
What are some common reasons for filing bankruptcy?
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Seriously overextended credit
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Unemployment or underemployment
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Business reverses
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Health problems
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Divorce or separation
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Emergencies
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Debts from helping your family
When should I consider bankruptcy?
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There are unpaid bills such as would be
impossible to pay off in the foreseeable future.
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A secured creditor is threatening foreclosure or
repossession.
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An unsecured creditor has commenced or
threatened a lawsuit.
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Creditor or collection agencies are making
frequent calls to your home...or worse, to your job...to collect on unpaid bills.
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A credit report is irretrievably damaged.
What Different Types of Bankruptcy Should You Consider?
There are several types of bankruptcy, but the most commonly used types
are known as Chapter 7 and Chapter 13.
Chapter 7. The first type of bankruptcy you should know about is Chapter 7
also known as “straight” bankruptcy. Chapter 7 usually allows most of clients to keep their property and not give it up to creditors. However,
careful planning is the key to making sure you keep your home, your IRA,
your 401K, your jewelry, your car and other property. WARNING! A good
consumer lawyer in most cases can file a Chapter 7 where NO PROPERTY is
given up! Want to learn a lot more about Chapter 7.
(Just click here.)
Chapter 13 is sometimes called “debt adjustment” or “consolidation.” In
Chapter 13, you file a plan to pay debts (or a part of debts) from your
current income. Chapter 13 can be very effective lowering or eliminating
interest rates. It also can be useful in forcing the creditor into a more
convenient payment plan. Want to learn a lot more about Chapter 13.
(Just click here.)
Chapter 20. “Chapter 20” is a combination of Chapter 7 and 13. In rare
circumstances, our bankruptcy lawyers will use this for our clients where
both a Chapter 7 and a follow up Chapter 13 could benefit them.
Chapter 11. Generally used for large corporate reorganizations or for individual
reorganizations where the debtor is over the chapter 13 debt limits.
Chapter 12. Family farmer reorganization.
Why would I choose to file chapter 13 over chapter 7?
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The debtor owns non-exempt property that would
otherwise be lost in chapter 7.
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The debtor is behind on car or house payments
and needs a chance to catch up on these payments over a long period of
time.
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The debtor seeks to “cram down” the amount of a
secured debt to the value of the collateral (not permitted on most
residential mortgages, nor...under the NEW law...vehicles purchased within
2 1/2 years of the filing).
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The debtor has received a prior bankruptcy
discharge in the last 6 years and is not yet eligible to obtain another.
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The debtor has debts that are not dischargeable
in chapter 7, but which are dischargeable in chapter 13.
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The debtor is seeking to protect a "co-signer" from
legal action
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The debtor may have need of bankruptcy relief
for future bills and wants to hold option the possibility for conversion
to chapter 7 or re-filing (e.g. anticipated medical bills).
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The debtor has been denied a chapter 7 discharge
based on some sort of substantial abuse.
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The debtor desperately needs to at least put
student loans under control.
Want to learn more about this
topic. (Just
click here.)
How much do creditors
receive in a chapter 13 plan?
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The debtor must devote all of his available
income to the plan for at least 36 months (and possibly longer under the
NEW bankruptcy law).
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The creditors must receive at least as much
money in chapter 13 as they would have received in chapter 7.
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Secured creditors are either brought current or
paid off during the plan.
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Priority claims such as certain taxes and back
child support must be paid in full.
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Different plans will pay unsecured creditors
between 4%-100% of their claim. In the Eastern District of North Carolina
(Raleigh to the Coast) the unsecured creditors are frequently paid no less
than 10 cents on the dollar. In the Middle District of North Carolina
(Durham to Winston-Salem) the unsecured creditors are frequently paid no
less than 25 cents on the dollar.
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The plan must be feasible with regards to income
and expenses.
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The plan must be proposed in good faith.
Want to learn more about this
topic. (Just
click here.)
Who Can File Bankruptcy?
Bankruptcy can be filed by an individual or by a married couple filing
together. In some cases it’s advisable for one spouse to file and not the
other. A good debt and credit attorney will know how to work in your best
interests.
What Property Can I Keep?
Most of the time, a good debt and credit lawyer can protect all or most of your property
from creditors even if you need to file for bankruptcy. It is important to
keep in mind that when you file for bankruptcy can be VERY IMPORTANT. Timing
is everything ... an experienced debt and credit lawyer can tell you when to
file.
Sometimes it is necessary to plan for bankruptcy and legally protect assets
before filing for bankruptcy. If you have a debt problem, you want to
preserve and protect as much of your property as possible for the benefit of
you and your family. This is where the skills and experience of a
good, experienced bankruptcy lawyer can make all the difference.
Many people believe they will lose everything they have if they file
bankruptcy and that they cannot own anything for a period of time after
filing for bankruptcy. This is not true. This is nothing more than
pure myth.
(Click here to find out more about these myths and many others.)
The truth is that there are things called "exemptions" that help most people
keep the things they need, even through bankruptcy. And, afterwards,
almost anything you obtain, you get to keep. There are narrow exceptions.
For instance, if you
receive or become entitled to an inheritance, a divorce property settlement, or life insurance benefits
within 180 days after filing for bankruptcy, that money or property may have
to be paid to your creditors, if the property or money exceeds available exemptions.
What property is a chapter 7 debtor in North Carolina
allowed to exempt?
The following is a partial list of exemptions available in North
Carolina. Caution: The understanding of and application of
exemptions is tricky and complicated. The help of an experienced
bankruptcy lawyer is essential to achieve the best results and to avoid
inadvertent or unnecessary adverse consequences.
Homestead. $10,000 equity in a residence (including a mobile home)
and burial plots
Wild card. $3,500 in value in any property less any amount of the
exemption used under the homestead exemption
Motor Vehicle. $1,500 in equity in one motor vehicle
Household Goods. $3,500 in value, plus $750 in value for each dependent
(not to exceed $3,000.00), in household goods and personal possessions. If a
married couple is filing, then only one spouse may claim any one dependent
for exemption purposes.
Tools of Trade. $750.00 in value in any implements, professional books,
or tools of the trade of the debtor.
Life insurance. Life insurance policies insuring the life of the debtor
in which his spouse and/or children are the named beneficiaries.
Health Aids. Professionally prescribed health aids for the debtor or a
dependent of the debtor.
Personal Injury proceeds. Compensation for personal injury or death of
the debtor or a person upon whom the debtor was dependent for support. The
compensation is not exempt from claims for related legal, health, or funeral
expenses.
Retirement plans. IRA accounts are exempted in North Carolina. 401(k)
plans and other ERISA qualified retirement plans are not part of the
bankruptcy estate.
Tenancy by the Entirety. The debtor may exempt real estate held tenancy
by the entirety. This generally requires the deed to read under Grantee
“John Doe and wife, Jane Doe”. This exemption will not however be effective
as to joint, unsecured creditors.
Wages. Compensation for personal services rendered within 60 days of
filing the bankruptcy which are reasonably necessary for the support of the
debtor and the debtor's family.
Other. There are a number of other significant exemptions including, but
not limited to: Social Security benefits, unemployment compensation, and
state and federal government pension funds.
90 day exception to exemptions. The North Carolina exemptions do not
apply with respect to certain personal property purchased by the debtor less
then ninety (90) days preceding the filing of the bankruptcy petition.
Married debtors: For spouses filing jointly, each spouse is allowed to claim
the above-referenced exemptions. Where only one spouse is filing, the value
of assets may be reduced to the extent the non-filing spouse holds an
interest in the property.
For a lot more information about exempts,
(click here), and read the section
entitled "Keep
and protect property you want to keep".
What if all of my assets are exempt?
This is a common occurrence and is referred to as a "no-asset" case.
How am I able to retain "non-exempt" assets?
- File chapter 13.
- Pay the chapter 7 trustee the equivalent value of the un-exempted portion
of your property.
- Take chance that chapter 7 trustee may elect to abandon the asset back
where
the liquidation (meaning "sale") of the asset would generate an insignificant
amount of
money.
Will Bankruptcy Wipe Out All My Debts?
With some exceptions bankruptcy will wipe out all of your debts. Some
debts like child support and certain taxes cannot be eliminated. Your lawyer can
tell you the specific debt which cannot be eliminated by bankruptcy.
However, keep in mind that in some circumstances a good lawyer can wipe out
even certain types of tax debt.
Some of your debts you may have to keep. For example, you may want to keep
your car. If so, you need to keep making your car payments. The same
goes for your home and other "secured" debts.
Every person’s situation is unique. The best advice is to consult with an experienced consumer
lawyer, who can analyze your specific situation.
Will bankruptcy stop a wage garnishment or stop a creditor from taking a judgment against me?
Bankruptcy will stop wage garnishments, at least for a while. If the
underlying debt gets "discharged" in bankruptcy, the garnishment would stop
permanently. The same goes for judgments.
Will I Have to Go To Court?
No, not usually, especially if the lawyer does her or his job. In most
bankruptcy cases, you only have to go to a proceeding called a "341
meeting", where you would meet with a bankruptcy trustee.
This is not a court proceeding. Most of the time, this meeting will be a
short and simple procedure where you are asked a few questions about your
bankruptcy forms, and your financial situation.
In at least 95% of the cases, the creditors do not bother to even show up for the
meeting! Occasionally, if complications do arise, or if you choose to dispute a
debt, you may have to appear before a judge at a hearing. But this is rare.
Hopefully, if this does occur, you will have hired a skilled and experienced
bankruptcy lawyer, who will guide you through the process, and protect you
to the full extent of the law.
Want more information on this topic:
(Click here)
What Else Should I Know About Bankruptcy?
1. Utility services: Most public utilities, such as the electric company, cannot
refuse or cut off service because you have filed for bankruptcy. However,
the utility can require a deposit for future service and you do have to pay
bills which arise after bankruptcy is filed.
2. Discrimination: An employer or government agency cannot discriminate
against you because you have filed for bankruptcy.
3. Driver's license: If you lost your license solely because you couldn't
pay court-ordered damages caused in an accident, bankruptcy may allow you
to get your license back.
4. Co-signers: Filing bankruptcy may protect you, but any co-signers you
have will still owe on the debt afterward.
5. Corporate debt: Filing bankruptcy may
protect you, but not your corporation. If a debt is owed by your
corporation, after your bankruptcy, your corporation will still owe the
debt.
Do I Have Enough Debt To File Bankruptcy? Many, if not most, of our clients are able to
rid of 10, 20, 30 and more dollars
.....for every dollar they spend on attorney fees.
Here's a simple guideline for you:
If we can't help you get rid of at least $5 in debt
.....for every $1 you spend with us for filing a case
under Chapter 7 of the U.S. Bankruptcy code,
.....you probably shouldn't be filing bankruptcy.
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