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Consider what bankruptcy is not and will not do before taking the proverbial dive

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Should I file bankruptcy ?”


When financially faltering individuals weigh their options, in addition to considering what they may gain through bankruptcy, they should develop a clear understanding about the ills bankruptcy will not cure.

Overwhelmed Man Charlotte Chapter 7 Lawyer Mecklenburg Debt LawyerIn a Chapter 7 bankruptcy, the bankruptcy trustee—a person appointed by the Bankruptcy Court to oversee a bankruptcy—will marshal the debtor’s assets, or take title to the debtor’s property. That means, in general, that whatever a debtor owns, the debtor surrenders to the bankruptcy trustee. The trustee then uses these “assets,” if any, to pay off debts.

Chapter 7 bankruptcies may seem appealing to individuals in financial dire straits because the perception is that the proceedings will erase all of an individual’s debts, enabling the debtor to start afresh after a bankruptcy discharge. Individuals considering a Chapter 7 bankruptcy should know, however, that it is difficult to qualify for this type of bankruptcy, and it is likely that a Chapter 7 debtor will have to enter into a repayment plan to repay “at least a portion” of one’s debts, according to Tushar Mathur of GoBankingRates.com.

If you are considering declaring bankruptcy under Chapter 7, give me a call today and we can see whether you qualify.

Chapter 13 bankruptcies enable individuals to retain certain property and can even help individuals ward off foreclosure of real property. Unlike a Chapter 7 bankruptcy, in a Chapter 13 proceeding, debtors “negotiate with creditors regarding how to pay… outstanding debts.”

A bankruptcy discharge under either chapter will not wipe out all of an individual’s debts. In many cases, debtors are still responsible for repaying “student loans, tax debt, child support or alimony, and other non-dischargeable debts.” In addition, the proverbial stain of a bankruptcy will follow a debtor long after the bankruptcy discharge has been issued.

A Chapter 7 bankruptcy will remain on a debtor’s credit report for ten years, while a Chapter 13 bankruptcy will remain on a debtor’s credit report for seven years. Most loan applications require an applicant to report a past bankruptcy declaration, even if the bankruptcy no longer appears on one’s credit report. If one does not report the bankruptcy, one could face charges for criminal loan fraud.

In addition, most employers ask prospective employees if they have ever declared bankruptcy. Some employers cannot hire prospective employees who have declared bankruptcy for liability reasons, while other employers may choose not to hire a prospective employee who has declared bankruptcy because the bankruptcy is considered to be a sign of unreliability.

Finally, many landlords may not rent to prospective tenants who have declared bankruptcy. In general, landlords want to rent to tenants who can be counted on to pay their rent. A bankruptcy declaration may be perceived as making it more likely that a landlord will encounter difficulties collecting rent from a prospective tenant, making it less likely that a landlord will lease property to the prospective tenant.

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.



About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.







Image Credit:

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