Bankruptcy is a court proceeding which lets a person or business have some or all of their debts excused. It should typically only be considered as an option of last resort, because it can have serious long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in North Carolina are often the same as anywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Buncombe County, North Carolina bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in Buncombe County, North Carolina
There are 2 typical types of bankruptcy in Buncombe County, North Carolina. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once appropriate assets are sold, and the money turned over to the creditors, most remaining debt is excused. However, there are certain types of debt that cannot be excused in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Buncombe County, North Carolina.
Chapter 13 Bankruptcy in Buncombe County, North Carolina
Chapter 13 bankruptcy in Buncombe County, North Carolina is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 does not absolve any debt, but it creates a new payment plan that should give the debtor some breathing room. Usually, all of the debts are consolidated into 1 periodic payment. While this might make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Buncombe County, North Carolina
Chapter 13 is typically a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.
Regardless of your situation, you should speak with an attorney in Buncombe County, North Carolina who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.