Chapter 7 vs. Chapter 13 Bankruptcy: What North Carolina Residents Should Know

Bankruptcy attorney Ben Tobey answering the question: What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?


In life, Americans will inevitably face challenges and obstacles as they attempt to build wealth and secure a financial future for themselves and their families. For some, these obstacles are overcome by some combination of tact, familial support, and luck. For others, however, these obstacles become too much of a burden. This is when discussions of filing for bankruptcy begin to enter the equation.


for-sale-sign-Charlotte-Mooresville-Monroe-Bankruptcy-attorney-300x200In the United States, bankruptcy laws fall under federal jurisdiction, meaning the structure and underlying framework of the process is fairly universal across states. However, many states draft their own additional legislation that outlines important considerations such as what property is exempt from bankruptcy collections when deciding to file, and North Carolina is no exception.


As anyone who has previously attempted to file for bankruptcy in North Carolina can attest, the process can be complex and stressful, especially when attempting to also manage the calls and from creditors attempting to collect on past due bills. This is why many residents elect to employ the services of an experienced local bankruptcy attorney.


By working with a bankruptcy attorney, residents will be able to quickly discover how their financial situation fits within North Carolina’s bankruptcy laws. Residents will also be able to consult and determine what type of bankruptcy — Chapter 7 or Chapter 13 — is the more appropriate type of bankruptcy to file given their situation.


While consultation with a bankruptcy attorney is always the preferred course of action, there are some general points of knowledge regarding the two main types of bankruptcy to which every North Carolina resident should be made aware.


Chapter 7 Bankruptcy in North Carolina


When people think of bankruptcy, the image in their minds is most likely a picture of Chapter 7 bankruptcy. This type of bankruptcy is relatively quick, tending to take only a few months to complete. Compared to other types of bankruptcy, it is also cheaper in terms of fees and payments to creditors. For those residents whose property consists mainly of the basic essentials, this is a great option.


Chapter 13 Bankruptcy in North Carolina


In contrast to Chapter 7 bankruptcy, Chapter 13 bankruptcy involves the creation of a strict repayment plan that you as the debtor must abide by. A major difference between these two types of bankruptcy is that Chapter 13 allows you to keep all of your property, as well as preventing a foreclosure on your home or repossession of your vehicle. However, the costs involved with Chapter 13 tend to be steeper than those associated with Chapter 7.


When to Contact an Attorney


As many residents in North Carolina will tell you, it can feel impossible to attempt to file for bankruptcy in the state without the aid and support of a trusted bankruptcy attorney. For years, the attorneys at Arnold & Smith, PLLC have been working with residents in Charlotte and throughout North Carolina as they navigate the bankruptcy process in their state. Contact Arnold & Smith, PLLC today for guided insight into your unique situation. Get a phone, in-person or video consultation by calling at (704) 370-2828 to speak with our detail-oriented and well-versed lawyers, or fill out our contact form. Now taking cases throughout North Carolina with offices in Uptown Charlotte, Mooresville and Monroe.





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