Bankruptcy in Siler City, North Carolina is a court procedure through which a person or business who is unable to pay their debt is able to have some of their debt legally excused, or "discharged." This theoretically allows the debtor to move on with a clean slate. Of course, one should never view bankruptcy as a "get out of debt free" card, allowing someone to be absolved of their requirement to pay their debts just because they don't want to. It is meant to serve as a lifeline, preventing uncontrollable debt from resulting in complete financial ruin. Accordingly, it is best treated as an option of last resort, because it can carry with it significant negative consequences, which must be weighed against the possible benefits. For example, filing for bankruptcy can heavily damage a person's credit rating.
Therefore, it is advisable to consult with an experienced Siler City, North Carolina bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Siler City bankruptcy attorney cannot be replaced.
Types of Bankruptcy in Siler City, North Carolina
In Siler City, North Carolina, there are 3 types of bankruptcy in common use: Chapter 7, Chapter 13, and Chapter 11. Because bankruptcy is a result of federal law, the procedures governing bankruptcy in Siler City, North Carolina will be similar everywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the funds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the qualifying property is sold, and the proceeds directed to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will normally be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other form of bankruptcy most often used in Siler City is Chapter 13. It allows a person to pay off their debt over a prolonged period of time, often consolidating it into one periodic payment. In this system, the amount of money the debtor owes is not actually reduced, but the payment of the debt is made far more manageable. This gives the debtor some breathing room, allowing him to continue to earn a living while slowly paying down his debts, and gives some security to creditors that they will eventually collect all or most of what they're owed. Though accessible to individuals, Chapter 11 bankruptcy is generally used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is presented, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.
During the Chapter 11 process, a business can normally continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.
How Can a Siler City Bankruptcy Lawyer Help?
The need to consider all the options and consider the costs and benefits of applying for bankruptcy in Siler City cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Siler City bankruptcy attorney beforehand.