Questions about bankruptcy
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Bankruptcy is on an overall decline in the U.S. since the Greensboro economy began to recover from the recession almost a decade ago. When consumers do decide they’re too deep in debt to continue, Chapter 7 is the most common type of bankruptcy in America. It is also the most sweeping form of bankruptcy referred to as a liquidation bankruptcy.
Debt Is Still a Problem in Greensboro
Over the past year, the Greensboro unemployment rate has fallen, and more people are prospering. However, just because things are improving in general, that doesn’t mean there aren’t consumers still struggling. Some people are stuck with residual debt lingering from the recession while others might be in a debt dilemma because they had a long bout of unemployment that’s finally ended.
In other cases, excessive debt can be triggered by a serious accident or illness that increased your expenses while dropping your income. Still, other consumers fall behind on their bills when they divorce or split up from a partner, and the adjustment to dual households proves too costly. No matter the reason, Chapter 7 bankruptcy might be the solution to your problems.
Who Can File Chapter 7 Bankruptcy?
You might be eligible for Chapter 7 debt relief no matter how much your income because the important factor is the amount of debt you have relative to your ability to pay. However, the lower your income, the greater the chance that you will qualify for Greensboro Chapter 7. If you earn above a certain threshold, you’ll have to have your finances run through the bankruptcy Means Test.
What Does Liquidation Mean?
A liquidation bankruptcy might sound excessive, and you could assume that everything you own would be sold to pay your debts – like when you see a “going out of business” liquidate sale that says everything must go. However, with consumer bankruptcy, that’s not how it works. You should be able to keep your car, your furniture, and all your other stuff thanks to North Carolina bankruptcy exemptions.
You can shield a reasonable amount of assets and even some cash using these exemptions. However, if you have costly items like expensive art or jewelry, those might not be exempt. Greensboro bankruptcy can protect a car with reasonable equity and even $35k in home equity for an individual filer and $70k in home equity for a couple filing together.
What Debt Does Chapter 7 Bankruptcy Discharge?
Unsecured debt, such as credit cards and medical bills, can be easily discharged in a Greensboro Chapter 7 bankruptcy. Signature loans can be as well – these are personal loans that have no collateral tied to them. Some income tax debts can also be discharged in bankruptcy depending on how long they’ve been outstanding. Also, private student loans may be dismissed depending on their age and status.
In some cases, federal student loans might be eligible for partial or total relief depending on your financial and personal circumstances. Those with chronic illness or permanent disability that impedes their ability to work stand the best chance of relief. To request the bankruptcy court’s intervention with federal student loans, you must file a separate case called an adversary proceeding.
Why Is Chapter 7 the Most Common Type of Bankruptcy?
Compared to other types of debt relief, including Chapter 13 bankruptcy, Chapter 7 is fast, sweeping, and affordable. From the date of filing, it takes an average of three or four months to see a discharge and elimination of most of your unsecured debts. Plus, from the moment you file by law, all debt collection efforts must stop so if you’re being hounded over past due bills, it stops at once.
If you’re a Greensboro consumer struggling with debt you cannot afford, Chapter 7 bankruptcy could be the answer for you. To find out more and see if you qualify for this fresh financial start, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 today for a free Greensboro bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.