Debt affects millions of Americans each year. For some, it’s maxed-out credit cards, overdue student loans, or underwater mortgages. But, nearly two-thirds of Americans who file for bankruptcy cite medical bills as a key contributor to their rising debt.
For those who find themselves in this challenging position, the law has created legal options to provide relief. If you find yourself with unmanageable rising consumer debt, contact the Pittsboro consumer bankruptcy attorneys of Bradford Law Offices.
Using our many years of experience, our skilled and compassionate attorneys will evaluate your situation and offer creative options that can get you back on the road to financial freedom. Call our office today at (919) 758-8879 to schedule your initial, confidential consultation.
Types of Consumer Bankruptcy
There are six types of bankruptcy available to Americans. Of the six different types of bankruptcy, only three are available to consumers, and just two of those are commonly used.
One of the six is effective when debt has accrued between countries, one is specifically for municipalities, and the third is designed for family farmers or family fishermen. The types of bankruptcy available to consumers are Chapters 7, 11, and 13.
Chapter 7: This type of bankruptcy is also called a liquidation bankruptcy. Individuals or businesses can use Chapter 7 to liquidate their assets and pay off their creditors. The court will assign a trustee who is responsible for selling the consumers’ assets and using the funds to pay creditors.
In many cases, if the assets are not enough to pay unsecured debt, like medical bills or credit cards, these are typically discharged by the court. However, there are certain types of debt that cannot be forgiven through Chapter 7 bankruptcy, including back taxes or student loans.
A Chapter 7 bankruptcy is available if the court finds that you do not make enough money to pay off your current debt. This decision is based on a means test. The test compares your income against the state average income.
This means test determines whether you have enough disposable income to pay back the amount you owe your creditors. If you do not meet the means test and your income is too low, you may qualify to file for Chapter 7 bankruptcy.
Chapter 11: For the most part, Chapter 11 is used to reorganize a business or corporation and pay off the debt. In this instance, the creditors and the court must approve the plan. Individuals may consider Chapter 11 if they have high-value properties or assets. However, for most individuals, Chapter 11 is more complex than their debts and assets require.
Chapter 13: When a consumer files for Chapter 7 bankruptcy, their debt is forgiven. Under Chapter 13 bankruptcy, the court reorganizes the debt and approves a monthly payment plan that can extend for three to five years. This allows the consumer to pay back a portion of their unsecured debt.
In this case, the court decides on a monthly payment plan that depends on the consumer’s income and the amount of debt. To maintain this payment plan, the court may decide to enforce a strict budget and routinely check your spending. Under Chapter 7 bankruptcy, your assets are sold to pay your creditors. Under Chapter 13, you may be able to stop foreclosure on your home and bring your mortgage up to date.
Do I Need an Attorney to File Bankruptcy?
Bankruptcy laws and procedures are complex and regulated by federal laws. For individual consumers, filing bankruptcy on your own can be a time-consuming and difficult process. After making the initial decision to file for bankruptcy, a consumer must then decide whether Chapter 7 or Chapter 13 is the best option for their situation and then figure out all the rules and procedures of the court so they can file the appropriate papers at the appropriate time.
The skilled legal team at Bradford Law Offices have many years of experience evaluating their clients’ situations and helping them determine the option that best meets their needs. Shortly after opening his law practice, Danny Bradford began focusing his legal skills on helping consumers and businesses with bankruptcy issues.
We know that if you’re considering bankruptcy, you have many questions. It is important to seek accurate information from legal counsel who understands the nuances of bankruptcy law and can help you through the situation.
Bankruptcy Is a Constitutional Tool
Many of our clients have expressed discomfort and embarrassment with the bankruptcy process. However, it is important to know that bankruptcy is a tool that the Constitution has supported since its inception over 200 years ago.
Giving consumers the opportunity to have their debt forgiven or restructured allows people to recover financially, which then improves their community. Our clients have discovered that bankruptcy has allowed them to repair their finances and create a better future.
Our legal Pittsboro consumer bankruptcy team has a deep understanding of bankruptcy law, and our clients are armed with the information they need to move toward a better financial future. Bankruptcy offers consumers the chance to start over, stop harassment from creditors, and get debt and stress relief.
What Steps Are Required to File Bankruptcy?
There are several steps to filing bankruptcy in Pittsboro, North Carolina. Our legal team asks consumers to gather their financial documents. This gives your attorney the chance to review your debt, assets, and overall financial health.
They use this information to help you evaluate your options for Chapter 7 and Chapter 13. Individuals who do not have a regular income to pay their obligations may pass the means test for Chapter 7. If a client does not meet the criteria for Chapter 7, a Chapter 13 bankruptcy may be an option. Consumers who have enough monthly income to maintain a repayment schedule and cover household expenses might be eligible.
Consumers must complete a pre-bankruptcy credit counseling class. During this class, a debt repayment plan may be prepared. Once the agency has issued a certificate of completion, it is attached to and filed with your bankruptcy petition to the bankruptcy court.
The federal bankruptcy court appoints a trustee who will handle the administration of the case. For example, under a Chapter 7 bankruptcy, the trustee will oversee the sale of assets to pay the creditors. Under a Chapter 13 bankruptcy, you would pay the trustee the money that’s left after paying your household expenses. The trustee then distributes this to your creditors in accordance with the repayment plan.
Contact an Experienced Consumer Bankruptcy Lawyer Today
If you feel like you’re floundering under a growing pile of debt, filing for bankruptcy may be a legitimate and smart option to help you get back on your feet again. Call the office of Bradford Law Offices at (919) 758-8879 to schedule your initial confidential consultation with one of our legal professionals. We will review the details of your situation and answer your questions, so you have the information you need to make an informed decision.