Seven things to know about NC bankruptcy
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Roughly a million Americans filed personal bankruptcy in 2015. Some did so under the advice of a reputable bankruptcy attorney. Some did so filing on their own behalf - and some without considering the full impact of bankruptcy or understanding the advantages and disadvantages of bankruptcy. Here are seven things you should know about North Carolina bankruptcy.
#1 Bankruptcy may not be the best option for you
For many consumers, bankruptcy can be life changing in the best possible way. For some, though, there may be an easier way out of their debt dilemma. Bankruptcy can help stop a foreclosure of your home, allow you time to catch up on past-due debts, and can wipe out many unsecured debts. You should weigh all your options including bankruptcy, negotiating with creditors, or trying to solve the problem yourself.
#2 There is more than one bankruptcy chapter to choose from
Most consumers may consider filing Chapter 7 or Chapter 13. To file Chapter 7, you must have a lower income or have far more debt than you can afford to pay on your income, even if your income is high. Most wage earners can file Chapter 13. Chapter 7 wipes out debt instantly while Chapter 13 gets you on a debt repayment plan to catch up what's past-due while still eliminating some of your debt.
#3 Bankruptcy may not be the best solution right now
Timing is a primary concern when it comes to filing bankruptcy. If you have older debts that will soon fall off your credit report, you may want to wait until these age out and then file. If you are facing foreclosure, but aren’t sure you want to keep your home, you may want to wait and consider your options. If you have tax debts that will soon become eligible for bankruptcy discharge, you may want to wait to file.
#4 You may be best served by filing both types of bankruptcy
In some cases, you may want to file BOTH a Chapter 7 and a Chapter 13 one after the other. This is called a “Chapter 20” and can help you wipe out some debts and then get on a repayment plan for others. This option often offers more complete debt relief when you have a complex mix of debt and more than one financial goal for your future. This is something for a reputable lawyer to consider with you.
#5 Filing without an attorney can be more costly in the long run
The case filing fees are the same whether you use an attorney or not, but you can often end up paying more in the long run if you don’t properly complete the paperwork or if your case is dismissed for improperly filed documents. You may also get less then complete debt relief if your petition is not properly prepared and all debts included that are eligible for discharge or the repayment plan.
#6 You may have debts left over after bankruptcy
Not every debt can be discharged or relieved in bankruptcy. Federal student loans will typically not be discharged (unless you file a secondary proceeding to request discharge and can prove undue hardship). Very recent tax debts will usually not be discharged and you usually can’t keep a home or car unless the debt owed on them is satisfied or negotiated down and paid off.
#7 Bankruptcy is something to plan strategically
Bankruptcy can be a constructive tool to eliminate debt and get residual debt under control. But how you use it, which chapter(s) you choose, and when you file are important to get the most complete debt relief so that you never end up in financial distress again. Talk to a reputable North Carolina bankruptcy attorney to discuss options and see which approach will help you get out of debt and meet your goals.
Contact the Law Offices of John T. Orcutt today for a free North Carolina bankruptcy consultation. Call +1-919-646-2654 now for a free no-obligation appointment at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.