Which is better for your Greensboro bankruptcy?
Image Source: Pixabay.com
Greensboro bankruptcy is something to consider if your debts are out of control, you’re being hounded by collection agents, and you can’t figure a way out of the mess. Bankruptcy is an intervention that can change the course of your financial future. It can stop foreclosure on your home, repossession of your auto, and put an end to threatened lawsuits by creditors. There are two common types of consumer bankruptcy – Chapter 7 and 13, but which is best for you?
What Assets Do You Own and How Much Are They Worth?
The first consideration when choosing which type of Greensboro bankruptcy is best for you is what assets you own and how much equity is in them. Chapter 7 doesn’t require you surrender all of your assets. In fact, North Carolina bankruptcy exemptions let you shield a reasonable amount of equity in a home, auto, other items you need, and even some cash in the bank.
Here Is What You Can Protect in NC Chapter 7:
Home – an individual can protect $35k in home equity, and if you file with your spouse as a couple, that doubles to $75k. If you’re over 65 when you file bankruptcy, the home exemption is $60k if your spouse is dead. Equity is the value of the home minus the mortgage.
Burial plot – If you have a burial plot that’s unused and are not using the home equity exemption, you can protect up to $35k and $70k in burial property for an individual or couple respectively. If you financed the grave plot, equity is value minus associated debt.
Vehicle – As long as you bought the vehicle more than three months before bankruptcy, you can shield $3,500 in one car, and your spouse can shield $3500 in another vehicle. Equity is the value of the vehicle minutes any loans outstanding on it.
Clothing, household items, furniture, etc. – If you file Greensboro bankruptcy as an individual, $5k of personal items including clothing, TVs, furniture, and similar items can be shielded. If you file as a couple, up to $10k can be shielded. If you also have dependents, you can protect another $1k for each dependent.
Professional/trade items – If you have tools, manuals, professional books, and other similar items required for your trade, you can protect $2k in value so long as the items were purchased more than three months before you filed Chapter 7.
College savings – Up to $25k in college savings can be protected if you’ve been setting aside money for your kids’ college and more if you file jointly. However, any contributions over the last year, might not be shielded but amounts before then should be protected in a Greensboro Chapter 7.
Lawsuit proceeds – If you are owed money from a personal injury done to you or for the wrongful death of a family member, that judgments should be shielded from bankruptcy. To find out more about the timing of judgments and bankruptcy, talk to your NC bankruptcy attorney.
Retirement and pension plans – Most retirement and pension plans are shielded in Chapter 7 bankruptcy.
Chapter 13 Allows You to Shield More Assets
If you choose Chapter 13 for your Greensboro bankruptcy, you can shield more assets than listed above. This is often the best course of action if you have more equity in your home than can be protected – or if you don’t qualify for Chapter 7 and it’s your only recourse. With Chapter 7, unsecured debt is discharged within just a few months. With Chapter 13, you set up a repayment plan to catch up past-due debt on your mortgage and car loan and usually will pay less on unsecured debt like credit cards.
Don’t Decide for Yourself, Talk to a Professional
Most consumers don’t fully understand the pros and cons of Chapter 7 versus Chapter 13 bankruptcy and which is best for their current and future finances. The best approach is to speak with a Greensboro bankruptcy attorney to discuss your circumstances and goals. They can explain whether you qualify for Chapter 7 and if you do, whether it’s your best approach. In some cases, you might qualify for Chapter 7 but would be better served by Chapter 13.
To learn more about the benefits of Greensboro bankruptcy, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.