Bankruptcy is a court proceeding which lets a person or business have some or all of their debts discharged. It should usually only be considered as an option of last resort, because it can have significant 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 controlled by federal law, and proceeds in federal courts. So, the process for filing for bankruptcy in North Carolina will be very similar to the process everywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local lawyer in Oak Ridge, North Carolina before filing.

Chapter 7 Bankruptcy in Oak Ridge, North Carolina

There are 2 main forms of consumer bankruptcies in Oak Ridge, North Carolina: 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 discharged. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, essential personal items, and retirement accounts.

Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is discharged. But some forms of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Oak Ridge, North Carolina debts are not dischargeable, you may want to consider options other than bankruptcy.

Chapter 13 Bankruptcy in Oak Ridge, North Carolina

Chapter 13 Bankruptcy in Oak Ridge, North Carolina is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each individual case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the agreements that gave rise to the debt in the first place. This results in a new payment plan that the debtor should find manageable, if he or she can make a few sacrifices.

Which Type of Consumer Bankruptcy Should I File in Oak Ridge, North Carolina

Chapter 13 is usually a good option for people who have a stable 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 stable income, Chapter 7 might be more beneficial.

In any case, you should talk with a local Oak Ridge, North Carolina bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.