Bankruptcy attorney Ben Tobey answering the question: Will a bankruptcy filing stop a foreclosure?
For many Americans in today’s society, the process of making investments and building wealth is a smooth one. However, for countless others, unforeseen obstacles and life events lead one’s level of wealth to deteriorate. When an individual’s debts begin to substantially outweigh their assets, many begin to seriously consider filing for bankruptcy.
Bankruptcy laws are federal laws, meaning they are uniform across every state in America. However, many states including North Carolina draft additional legislation that defines what property can and cannot be kept when filing for bankruptcy. Additionally, state laws determine how and where to file for bankruptcy.
When determining whether or not to file for bankruptcy and what type to file, consultation with a trusted local bankruptcy attorney is always the best course of action to take. However, there are some general points of information regarding the filing process in North Carolina that all residents should know.
Choosing the Right Chapter
In the majority of bankruptcy filings in North Carolina, filers will select either Chapter 7 or Chapter 13 bankruptcy. For most individuals, Chapter 7 bankruptcy is an attractive option because it only takes a few months to complete the process, and the overall costs involved in this type of filing are generally lower.
If you live a relatively minimalist lifestyle without a lot of luxury items, Chapter 7 may be the appropriate type of bankruptcy to file. One of the biggest downsides to this option is the threat of losing your property, such as a house or car, if you are significantly behind in repayments when you file.
Chapter 13 is an option for filers who have what it takes to commit to a three- or five-year repayment plan. Choosing this option forces your creditors to develop a repayment plan for your debts. While this type of bankruptcy allows you to hold onto your possessions, the monthly repayment amount may be steep, causing additional stress for filers.
Know Your Exemptions
North Carolina, like other states, lists a number of bankruptcy exemptions. For example, the “Homestead Exemption” in North Carolina is used to protect up to $35,000 in equity of any real property that is used as a residence.
Additionally, North Carolina law provides an exemption for motor vehicles. Up to $3,500 of value in one motor vehicle can be exempted from bankruptcy claims. However, if the vehicle was purchased within 90 days of filing, this exemption may not apply; consult with your bankruptcy attorney to better understand your options.
The Power of Legal Counsel
Applying for bankruptcy can be a confusing and stressful process, which is why North Carolina residents are advised to work with a trusted bankruptcy attorney in their area. For years, the attorneys at Arnold & Smith, PLLC have been helping residents in Charlotte and North Carolina find their way through bankruptcy court. 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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