Bankruptcy

The period in which a bankruptcy filing is contemplated is often a difficult and tumultuous time. Many events can lead up to the decision to file bankruptcy such as job loss, underemployment, divorce, business environmental changes, health issues, or any of a myriad of other unforeseen circumstance which lead to financial difficulty. If you are in a position wherein it is seemingly impossible or unlikely you can ever repay your creditors or debts, bankruptcy protection may be right for you. The decision however to file bankruptcy should never be taken lightly. Bankruptcy does carry long term financial implications for the filer. Deciding on whether or not bankruptcy protection is right for you is a process in which our office will provide guidance on and eventually lead you to the appropriate course of action.
Filing for bankruptcy immediately stops collection attempts by your creditors. If you are facing foreclosure or attempted execution from a judgment creditor, bankruptcy protection may be a viable alternative to stop those proceedings. Ultimately the goal in bankruptcy is to obtain a discharge of those debts which are dischargeable under Federal Law. While all debts and obligations are not dischargeable, those debts that are discharged release the debtor from paying those obligations which existed prior to the bankruptcy filing. In addition, you may be able to keep certain assets which are exempt under North Carolina Law. Some but not all of those exemptions are:

• Homestead exemption of $35,000.00 in value in real or personal property used as a residence or burial plot

• Motor Vehicle value up to $3,500

• Household goods up to $5,000 plus $1,000 for each dependent

• Tools of trade in the amount of $2,000

• Life insurance policies where a spouse or child is the beneficiary

• Professionally prescribed health aids

• Personal injury compensation is exempted except for related legal, health or funeral expenses

• Individual retirement plans, most 401k plans and other ERISA qualified plans.

• 529 plans not exceeding $25,000 subject to contributions made that were made within 12 months of filing must have been made in the ordinary course of the debtor’s customary contributions.

• Alimony and/or post separation support.

• Real property held Tenants by the Entireties as to unsecured creditors if there are no joint (Husband and Wife) debts.

• Wages earned in the 60 days prior to bankruptcy as long as they are necessary for the support of the debtor and their dependants.

However, not all debts are dischargeable. Some but not all of the obligations which are not dischargeable are:

• Taxes

• Child Support obligations

• Student Loans

• Criminal fines

• DWI offense debts

• Obligations or debts the subject of divorce and/or separation

• Debts incurred through fraud or other misconduct

During your free consultation, we will walk you through and determine what bankruptcy may be right for you. You may qualify, subject to certain income guidelines and asset exemptions, for a Chapter 7 “no asset” or straight bankruptcy; or you may need to file a Chapter 13 in which a repayment plan is devised and upon approval by the Bankruptcy Court, the filer pays their creditors an amount determined and in accordance with the court up to 60 months after filing and plan approval. It is important to be prepared if you are contemplating filing for bankruptcy. It may be in your best interests to stop paying those debts which will be discharged in a bankruptcy and pay those which will survive the bankruptcy. You should stop incurring additional debt and not attempt to secret away assets or transfer assets to friends or family members to avoid creditors. Actions such as these can cause the Bankruptcy Court to deny your discharge.
It is important you contact our office for a frank and candid discussion regarding your financial position. Having financial difficulty or being in a position of seemingly insurmountable debt, is nothing to be ashamed of. Bankruptcy Laws exist to provide individuals with a fresh start. Let us help you with that fresh start by contacting our office to address and assess your particular financial situation.