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 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 proceeds in federal courts. So, the procedure for filing for bankruptcy in North Carolina will be very similar to the procedure anywhere 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 Attorney in Trent Woods, North Carolina before filing.
Chapter 7 Bankruptcy in Trent Woods, North Carolina
There are 2 main types of consumer bankruptcies in Trent Woods, North Carolina: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, 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 types 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 Trent Woods, North Carolina debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Trent Woods, North Carolina
Chapter 13 Bankruptcy in Trent Woods, North Carolina is very different from Chapter 7. Whether or not it is a better option is highly 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 Trent Woods, North Carolina
Chapter 13 is usually 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.
In any case, you should talk with a local Trent Woods, North Carolina bankruptcy Attorney. Your Attorney 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.