Bankruptcy is
a process governed by federal law to help individuals or entities that cannot
repay their debts. Bankruptcy
gives debtors in Raleigh,
Wilson,
Durham, Fayetteville, and across North Carolina various options for repaying the money they owe. Bankruptcy should
not be viewed as a way to escape from debt, but rather as a chance for debtors to move
forward with their lives by giving them a way to protect their homes and provide for their families,
ultimately restoring them as financially productive members of society.
The federal bankruptcy laws were enacted because the government understands that
in certain cases debtors can find themselves with insurmountable bills. In
1934, the Supreme Court stated that bankruptcy "gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt."
For decades, bankruptcy has been a viable alternative for families in Raleigh, NC and the surrounding communities who find themselves struggling with debt. In 2005, a new bankruptcy law was passed. That made it harder for some debtors to qualify, but knowledgeable bankruptcy attorneys with a full understanding of the code changes have successfully filed for thousands of clients under the new laws. That's important because more and more North Carolina debtors are seeking bankruptcy protection in these hard economic times, said one Raleigh bankruptcy lawyer in a December 2008 news item.
The two of the most common types of bankruptcy filed are Chapter 7 and Chapter 13.
Chapter 7
Chapter 7, entitled Liquidation, involves a court-supervised trustee taking over the assets of the debtor's estate. The trustee is in charge of turning nonexempt property -- property that cannot be shielded from creditors -- into cash. That cash is used to make payments to creditors. Because there is usually little or no nonexempt property in most Chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A skilled bankruptcy lawyer can determine if Chapter 7 will work for you. The advantages of this option is that you may be able to keep your car, your home and other valuable possessions.
Using Chapter 7, a skilled bankruptcy attorney can provide these benefits:
- Reduce or eliminate certain debts.
- Stop creditor harassment.
- Stop repossessions or foreclosures.
- Stop garnishment of wages.
Chapter 13
A Chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan that allows them to pay creditors in installments over a period of three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years, according to 11 U.S.C. § 1322(d). During this time, the law bans creditors from starting or continuing collection efforts.
A qualified bankruptcy attorney can assess which type of bankruptcy is best for your debt situation. A bankruptcy lawyer also knows the best steps to take so that a debtor can qualify.
If you and your family are suffering from crippling debt, consulting a qualified bankruptcy lawyer may be the best thing you can do for your future. An experienced bankruptcy attorney can best help you decide which course of action to take and can handle the paperwork better and faster than a less experienced attorney.
Please fill out the form below to have your case evaluated by an experienced bankruptcy lawyer free of charge. Provide as much information as possible to speed the processing of your inquiry.
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