Bankruptcy doesn't follow you home
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Many people have the wrong idea about bankruptcy. They make assumptions based on what they see in movies and on TV or sensational headlines about celebrities going broke. One of the misapprehensions about bankruptcy is that a bunch of federal agents will pull up at your house with a giant truck and take all your possessions. It shouldn't happen to you (or anyone else). Bankruptcy isn’t a problem - it's a solution - and in most cases, you won’t lose any assets.
North Carolina bankruptcy exemptions protect assets
When you file bankruptcy, you must disclose what you own, including furniture, clothing, automobiles, art, jewels, etc. But listing it doesn’t mean losing it. North Carolina bankruptcy exemptions allow you to protect a reasonable amount of assets. As an individual filer, you can shield $35k in home equity and a couple filing bankruptcy together can protect $70k in home equity. Your car’s blue book value minus any loan balance indicates the equity in your vehicle, and you can usually keep the auto.
The only time you might have a problem is if you have valuable art, a cache of fine jewelry, or luxury autos. Chapter 7 bankruptcy gets you out of a lot of debt within just a few months, and you can protect assets with exemptions. However, if you have more assets than can be protected, Chapter 13 bankruptcy may be the answer. You can shield more assets and equity while getting on a manageable repayment plan to get your finances back on track.
When can your house be searched?
The only time the bankruptcy court might send someone to knock on your door is if they suspect you of blatant fraud. If you live in a mansion that you own free and clear with walls lined with costly art and you fail to claim these assets while trying to ditch your debt, you might face some trouble. However, the more likely outcome is that your bankruptcy case will be dismissed, and you could be charged with bankruptcy fraud. But so long as you’re honest with the court, you shouldn’t be subject to any home visit or drama.
Always be honest with the court
Federal bankruptcy law offers you the chance to get yourself out of a sticky financial situation without losing everything you own. In exchange for that chance, you must be honest with the court. If you own lots of assets, the expectation is that you use that value to get yourself out of debt. However, if the bulk of your assets are in exempt retirement accounts, you may still be able to shed debt and keep those. These are matters to discuss with your bankruptcy attorney.
You must be honest with your lawyer and the court to stay out of trouble and get equitable relief under the law. Trying to game the system is when people wind up in trouble like Abby Lee Miller, who is currently in jail for hiding income from her TV show Dance Moms while using bankruptcy to get out of debt. Failing to list assets, hiding income, or transferring assets to friends or family can land you in hot water, but if you play by the rules, you’ll be fine.
Bankruptcy is straightforward
If the Trustee assigned to your case suspects fraud, they may dig into your claims and look at your property and assets more closely, but they won’t back up a truck and start hauling off your stuff. The court process is simple. Be honest, play by the rules, and you can benefit greatly from the protection and debt relief offered under federal bankruptcy law. You will have to make one, or maybe two appearances at the bankruptcy court and your lawyer handles the rest.
Bankruptcy isn’t stressful – debt is stressful. To find out more about the benefits of bankruptcy, contact the Law Offices of John T. Orcutt. Read reviews from our clients, then call +1-919-646-2654 to schedule a free North Carolina bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.