If you are facing severe financial difficulty, our team at Farmer & Morris Law, PLLC, wants to help you find solutions and start a path toward financial stability. We carefully consider the details and complexities of your financial status and needs, then start strategizing ways to achieve debt relief. We assist clients in filing bankruptcies under:
If you would like more information on how a bankruptcy lawyer from our firm in Rutherfordton, North Carolina, can help you, we offer free consultations to new clients.
Our Lawyers Help Both Individuals and Business Owners File for Bankruptcy
According to the United States Courts, the Bankruptcy Code lists six chapters under which individuals, businesses, and even municipalities can file bankruptcy.
At Farmer & Morris Law, PLLC, our team of bankruptcy attorneys handles cases involving the following chapters:
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows individuals to sell their nonexempt assets to pay back debts and then have their remaining debts discharged. This process is referred to as liquidation. Keep note, though, that individuals are often still able to retain many of their assets, including their home equity, household goods, and car.
You must meet specific requirements to file Chapter 7 bankruptcy, but the most important one is the income requirement.
Chapter 7 is usually an option for individuals who have no financial means to pay off their debts, so qualifying individuals must pass a “means” test. This test measures your ability to live with your current income and pay off your debts. If you make equal or below your state’s median income of a family of similar size, you may qualify to file.
Chapter 13 Bankruptcy
If you make above the state median, you may qualify for Chapter 13 bankruptcy. This can be a more favorable option for individuals, as this process allows them to “reorganize” their debts. If you are still making a regular income, this can be a good option if:
- You are facing foreclosure on your house.
- You run a small business or are a sole proprietorship and still making some income.
- You have fallen behind on your payments but can still make future payments.
- You do not want to risk liquidating any of your assets.
By filing for Chapter 13 bankruptcy, you can have the court approve a repayment plan that you will commit to for the next three to five years. Also, once you file bankruptcy, an automatic stay will go into effect, preventing creditors from collecting your assets (e.g., your home). This can allow you time to negotiate your loans and work out a reasonable repayment plan.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is an option for businesses, usually:
- Limited liability companies (LLCs)
- Sole proprietorships
While small businesses can file for Chapter 11 bankruptcy, the fees involved with this process can be too expensive for small business owners, especially if they have taken out personal loans to back up their business.
Chapter 11 acts similarly to Chapter 13 in that it allows debtors to reorganize their business in order to preserve it. However, because it involves corporations or larger-scale businesses, the process can be more complex. Our team can explain how Chapter 11 bankruptcy may affect your business once we review your financial circumstances.
Chapter 12 Bankruptcy
Chapter 12 bankruptcy is a specific bankruptcy process for family farmers and fishermen, which is the title written in the Bankruptcy Code. This chapter allows individuals to preserve their family farm or fishing business by letting them reorganize their debts.
Debts You May Be Able to Discharge
If you are filing for bankruptcy, one of your main concerns after choosing which chapter to file under is likely what kind of debts you may be able to get discharged.
At the start of the bankruptcy process, you will be appointed a trustee from the bankruptcy courts to review your debts. One of our bankruptcy lawyers in Rutherfordton can help you organize your debts into the following categories:
Secured debts involve any debt attached to property, such as mortgage loans or car loans. These debts can be put at risk if you default on them, meaning creditors can take them away.
When you file for bankruptcy, you can place an automatic stay to buy you time to negotiate these loans. In many cases, people can still retain these assets, but you must act quickly before the creditors attempt to make a foreclosure sale or repossess your vehicle. Once they make a sale, you cannot get your property back.
Unsecured debts are debts not attached to a property. They may include things like:
- Credit card debt
- Student loan debt
- Medical debt
- Back rent
- Gym club memberships
- Other dues, such as those for unions or a place of worship
- Personal loans
Most unsecured debts can be discharged through bankruptcy. However, if you want to discharge student loans, you may have to file a separate action, as noted by Federal Student Aid (FSA).
Priority debts typically cannot be discharged, so you must pay them back. Whether you liquidate your assets or reorganize your debts, any money or payments distributed during the bankruptcy case will first be made toward these. Priority debts include:
- Most tax debts
- Child support
- Fines or other types of criminal debt
- Money owed to employees from employers
Our Bankruptcy Lawyers Can Help You Fight for Debt Relief
The bankruptcy process can be convoluted, so we understand why you might be hesitant to start it. However, time is not on your side when creditors are demanding payments.
Our team is prepared to help you fight for the debt relief you need. We can manage your case for you and keep you updated on its progression. Here are a few of the services we offer:
- Filling out bankruptcy paperwork for you and submitting it on time
- Appearing in court hearings to present your case
- Representing you in meetings (e.g., your mandatory 341 meeting)
Our Bankruptcy Lawyers Serve People in Rutherfordton, North Carolina
Farmer & Morris Law, PLLC, provides bankruptcy assistance to individuals, families, and businesses in North Carolina and South Carolina.
Call us today at (828) 286-3866 for a free consultation regarding bankruptcy or other debt assistance options. We have a bankruptcy lawyer and Rutherfordton litigation lawyers or business law lawyer from our firm in Rutherfordton who can start working for you right away.