Questions about Wilmington bankruptcy answered
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Some people see Wilmington bankruptcy as a bad thing, but this is often because it’s vastly misunderstood. Many view a bankruptcy as something to dread after a series of unfortunate financial circumstances. However, the truth is that bankruptcy represents an end to the stress of owing more than you can pay and the start of a brighter tomorrow with more options, less debt, and hope for the future. To help you better understand the benefits of bankruptcy and what to expect, here are answers to some of the questions we are most frequently asked by new clients when they come to see us.
1 – What Is Bankruptcy?
Bankruptcy is a protection from debt afforded under federal law. When you can’t pay your debts, Wilmington bankruptcy offers a fresh financial start. It stops debt collections dead in its tracks, can stop or delay foreclosure and repossession of your assets.
2 – Is All Bankruptcy the Same?
No. There are two types of consumer bankruptcy – Chapter 7 and 13. The first is intended for those with mostly unsecured debts and that are either current on secured debt or do not have secured debt they’re trying to maintain. Chapter 13 is a longer-term repayment plan to help with delinquent secured debt.
3 – Does Bankruptcy Relieve All Debt?
It depends on what type of debt you have. Medical bills, credit cards, and other similar unsecured debt can be 100% discharge in Chapter 7 and greatly (or totally) reduced in Chapter 13. Student loans can be lessened or discharged in some bankruptcy cases.
4 – Can You File Any Bankruptcy You Want?
Chapter 13 is open to most any consumer. To file Wilmington Chapter 7 bankruptcy, you must earn less than the median income for North Carolina or pass the “Means Test” which proves that you cannot afford your debt based on your current income.
5 – How Long Does Bankruptcy Take?
Chapter 7 bankruptcy takes just a few months. Chapter 13, however, is a three to five-year process because it is a repayment plan to catch up on past-due balances on secured debt over time. You can start the process in one short meeting with an experienced Wilmington bankruptcy lawyer.
6 – Will You Lose Assets in Bankruptcy?
Some people fear that filing bankruptcy means that the government takes everything they own to pay their debts. This is simply not true. You can protect a reasonable amount of assets using bankruptcy exemptions. Bankruptcy doesn’t mean you will lose everything – and you might not lose anything.
7 – Does Bankruptcy Ruin Your Credit?
If you’re deep in debt you can’t pay, and you’re missing payments and maxed out, your credit is constantly dropping. Wilmington bankruptcy can stop the credit score free fall and allows you to rebuild. Bankruptcy initially drops your score, but then the recovery can begin.
8 – Can You Change Your Mind After You File?
Once you file Chapter 7, it usually can’t be stopped because it only takes a couple of months to complete and most judges won’t stop the process. In Chapter 13, you request a dismissal if you change your mind or the case will be involuntarily dismissed if you miss payments.
9 – Can You File Bankruptcy More Than Once?
Yes, you can file bankruptcy more than once. There is generally no limit on the total number of times you can file, but there are limits on how often you can file. If you got a Chapter 7 discharge, you can’t file for another eight years. Repeat Chapter 13s have a more complex timeline as does mixing chapters.
You may have more questions than these, and our North Carolina bankruptcy experts are happy to answer them all. An informed consumer is our best client. To find out the benefits of Wilmington bankruptcy, contact the Law Offices of John T. Orcutt today. Call +1-919-646-2654 for a free bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Also, please read reviews from satisfied clients, so you know what to expect during the bankruptcy process.