Bankruptcy is a court proceeding which lets a person or business have some or all of their debts absolved. It should normally 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 Siler City, North Carolina before filing.
Chapter 7 Bankruptcy in Siler City, North Carolina
There are 2 common forms of consumer bankruptcies in Siler City, 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 absolved. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some forms of debt, however, can't be absolved in Chapter 7 Bankruptcy in Siler City, North Carolina. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Siler City, North Carolina
Chapter 13 Bankruptcy in Siler City, North Carolina differs substantially from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not excuse any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may 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 Siler City, North Carolina
The answer to this question depends strongly on your particular situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Siler City, North Carolina. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).