Certain financial hardships, such as losing your job, can make it challenging to manage your finances. If your debt amount exceeds your capacity to make the required payments, you may be considering bankruptcy to stop foreclosure and repossession efforts.
At Farmer & Morris Law, PLLC, we can help you determine your options for filing bankruptcy in North Carolina. Our Shelby bankruptcy lawyer helps individuals and small businesses seek debt relief through bankruptcy.
Our Bankruptcy Attorneys in Shelby Will Explain Your Options
Bankruptcy gives those who have fallen behind on their finances a fresh start. When you explore your bankruptcy options, one of the most important things we can help with is determining which type of bankruptcy is right for your needs. Other ways we can help with your Shelby bankruptcy include:
- Providing key insight on your debt relief options
- Explaining the bankruptcy process so that you know what to expect
- Outlining the possible exemptions and types of debt you may be able to discharge in your case
- Determining the right kind of bankruptcy for you based on your income and the assets you want to keep
- Working with you to complete all required forms
- Discussing the possible tax implications you will need to know
- Ensuring you complete all credit counseling and other required courses during the process
- Compiling documents you need within the required timelines
- Representing you during the meeting with your creditors as 11 U.S. Code § 341 requires
Our bankruptcy attorneys in Shelby can help if you are an individual or small business that needs help with a Chapter 7 or Chapter 13 bankruptcy. Additionally, we handle Chapter 12 bankruptcies for family farmers and Chapter 11 reorganization bankruptcy.
Financial Hardship May Require You to File for Bankruptcy in Shelby
In Shelby and throughout North Carolina, an unexpected hardship or another difficulty may cause financial challenges. You may need to file for bankruptcy for several different reasons, including:
- A medical issue that prevents you from working and results in excessive medical debt
- An inability to pay loan payments or other debts because of high compounding interest
- Income garnishment for child support or student loans worsening your financial situation
- A once reasonable loan amount, such as a car payment or mortgage that becomes unmanageable
- Sudden unemployment or a severe wage reduction that affects your ability to meet your obligations
- An unexpected expense, such as a broken part in a vehicle you need to get to work, that causes you to neglect other debt obligations
- Missed payments that drive up interest rates and generate high fees
- The rising cost of living, which your income does not reflect
If you cannot keep up with your financial obligations, you may become unable to pay off your creditors, leading you to default on your loans. Creditors can initiate collection actions when you default on a loan. Collection proceedings can enable creditors to execute a judgment against your personal property, such as your home or car.
A foreclosure or repossession can occur when creditors execute a judgment against your personal property. You may face losing your home or vehicle, creating a severe hardship that is hard to overcome.
What Is the Process of Preparing a Shelby Bankruptcy Filing?
The process of filing for bankruptcy can require the special preparation of documents and involve strict timelines. Some of the things you can expect to do during a bankruptcy filing include:
- Itemizing your debts
- Submitting a list of secured and unsecured debts
- Providing an inventory of your assets
- Providing the estimated worth of your assets
- Completing the correct exemption paperwork
- Notifying your creditors of your bankruptcy filing
Failing to comply with filing rules and deadlines can prevent your case from proceeding or result in some debts not being discharged. We can help you take the correct initial steps and navigate the often-complex process of filing. Additionally, you must complete credit counseling before you can file for bankruptcy in Shelby. You will also have to complete financial management counseling after you file before your debts are discharged.
Understanding the Differences Between Chapter 7 and Chapter 13 Bankruptcy
One of the first steps to take when filing for bankruptcy in Shelby is to determine which bankruptcy chapter is right for you. Our bankruptcy lawyers will use the facts of your situation and the eligibility requirements for filing to determine the best option for your needs.
What Chapter 7 Bankruptcy Consists Of
Chapter 7 is the most common type of bankruptcy that individuals file. This type of bankruptcy allows you to completely discharge your debts. During Chapter 7, you can claim some property as exempt, meaning that it will not be sold or liquidated to cover the debt you owe your creditors.
Additionally, many people filing for Chapter 7 bankruptcy in Shelby do not have any nonexempt assets. In this case, you may be able to keep all your assets while discharging qualifying debts. As soon as you file for Chapter 7 bankruptcy, your creditors cannot take action to collect debts from you.
The court assigns you a trustee who reviews your estate, which includes personal assets such as:
- Cash, bank accounts, and investment accounts
- Real estate holdings and your home
- Personal possessions and valuables
What Chapter 13 Bankruptcy Consists Of
Chapter 13 bankruptcy is for people who can pay back their debts but need help with catching up on past due obligations. This is why Chapter 13 is often referred to as reorganization bankruptcy. It provides you with a way to restore your financial health by adjusting the terms of your debts with your creditors.
Unlike Chapter 7 filings, which fully discharge your debts after liquidating your assets, Chapter 13 lets you create a payment plan with your creditors. The plan allows you to pay back what you can afford over a specific period. After this repayment, the remaining portion of your debt is discharged in a Chapter 13 bankruptcy. You can expect your Chapter 13 payment plan to last between three and five years.
Can I Keep My Property in a Chapter 13 Bankruptcy in Shelby?
You can retain exempt and nonexempt property during Chapter 13, but you must show an ability to afford them. The market value of the nonexempt property you want to keep is added to the balance of your payment plan. If you cannot afford to retain the nonexempt property, the Chapter 13 trustee may liquidate it and distribute the proceeds to creditors.
Can I Discharge All of My Debts in a Chapter 7 Bankruptcy?
Certain debts are almost always dischargeable, such as:
- Installment loans
- Credit card debt
- Civil judgments
- Utility bills
Although most debts are discharged during Chapter 7 proceedings, some are non-dischargeable, such as:
- Student loans
- Domestic support obligations such as alimony and child support
- Debts incurred because of fraud
- Tax debts
What Exemptions Do North Carolina Bankruptcies Allow?
G.S. § 1C-1601 outlines the specific exemptions allowed in North Carolina bankruptcies. Additionally, the law states that common federal bankruptcy exemptions are not allowed in North Carolina and that only the exemptions outlined in the statute apply. Some of the exemptions you may claim include:
- Up to $35,000 in equity for any property used as a home
- Up to $3,500 for a motor vehicle
- A total of $5,000 in combined personal property, including household goods and furnishings
- An exemption for any property up to $5,000 for what is known as the wild card exemption
- Retirement and pensions
- Up to $2,000 for professional tools or implements you need for your trade
Contact Farmer & Morris Law, PLLC, Today
If you need help understanding your options for debt relief in Shelby, we can help. Our bankruptcy legal team will work with you to determine the best choice for your needs and prepare your bankruptcy filing for you. In addition, we will look at your assets, debts, and income to find a solution that is in your best interests and ensure you claim all applicable exemptions.
Call Farmer & Morris Law, PLLC, today at (704) 482-1112 for more information about your bankruptcy options.