If you face debt from unpaid medical bills, credit cards, and other expenses, do not hesitate to contact Bradford Law Offices. You might qualify for Chapter 7 bankruptcy.
Choosing to file for bankruptcy is often an overwhelming decision. You might not want to go through the process but know it’s your only option for getting the creditors off your back. Filing for Chapter 7 bankruptcy can relieve your burden while getting your finances back on track.
The Wake Forest business bankruptcy lawyers of Bradford Law Offices understand the challenges you face. Paying off your debt is a priority, but you don’t know how to do it. Many people don’t have the money to satisfy their outstanding debt. Whether you owe a credit card company, medical provider, or lender, you need legal representation and guidance to sort through the mess.
The legal team from Bradford Law Offices has represented clients in Wake Forest since 1996. We can review your documentation to determine whether filing for Chapter 7 bankruptcy is your best option. Discharging or reorganizing your debt could relieve your financial strain and give you the time you need to pay back the money you owe.
Call us at (919) 758-8879 for a free and confidential consultation today.
Who Is Eligible for Chapter 7 Bankruptcy?
Individuals and businesses facing significant debt can file for Chapter 7 bankruptcy. The means test is one of the tools used to determine someone’s eligibility. This test indicates whether someone meets the required criteria after an examination of their finances.
However, even if you meet the requirements to file for Chapter 7 bankruptcy, you could face a denial for a range of reasons, including:
- You earn a higher income than the median income in the state
- You had filed for Chapter 13 bankruptcy within the last six years or Chapter 7 bankruptcy within the previous eight years
- You can use your disposable income to pay back part of your owed debt
- You didn’t meet the credit counseling requirement
If you’re not eligible to file for Chapter 7 bankruptcy, you might have other options. Filing for Chapter 13 bankruptcy could be possible depending on whether you meet the criteria. You could also file for Chapter 11 or 12 bankruptcy. Bradford Law Offices can review your financial information and determine which option makes the most sense for your situation.
Debts You Can Discharge with Chapter 7 Bankruptcy
You might be able to discharge some of the debt you owe if you qualify for Chapter 7 bankruptcy. That means creditors can’t continue to come after you for the money you owe them.
The types of debt you can discharge through Chapter 7 include:
- Store accounts
- Credit cards
- Medical bills
- Certain types of tax obligations
- Unsecured personal loans
- Vendor or trade debt
- Deficiency balances from selling a foreclosed mortgage or repossessed vehicle
- Personal liability from the guarantee of someone else’s debt
You can’t discharge every type of debt when you file for Chapter 7. The most common debts you must keep include:
- Certain tax obligations
- Debt incurred by fraudulent activity
- Student loans
- Criminal restitution
- Debts incurred from malicious or willful injury
- Marital/domestic obligations
- Debts incurred by misappropriating or misusing funds while performing a fiduciary duty
Common Types of Property Exemptions in North Carolina
When you file for Chapter 7 bankruptcy, a trustee sells the non-exempt assets you have to pay off as much of the money you owe as possible. However, there are specific exemptions in North Carolina, so you don’t risk losing everything.
Common property exemptions in Chapter 7 bankruptcy include:
- Personal property – You could exempt up to $5,000 for your personal property, such as appliances, clothing, and furniture. If you have dependents, you can also exempt $1,000 in personal property for each dependent up to a maximum of $4,000.
- Motor vehicles – You’re allowed to exempt up to $3,500 if you bought your vehicle more than 90 days before filing for Chapter 7 bankruptcy.
- Homestead exemptions – The homestead exemption protects up to $35,000 of property you use as a residence. A higher value could apply under specific circumstances.
- Burial plots – A $35,000 exemption in burial plot equity is available if you don’t use the homestead exemption.
- Government benefits – Exemptions include money for benefits, such as future Social Security benefits, veterans’ benefits, and unemployment.
- Compensation for personal injury – If you recovered compensation from filing a personal injury claim, the money is exempt in many situations unless you have unpaid bills associated with the claim, such as medical expenses.
- Professional tools – Any tools or instruments you use for your job are subject to a total exemption of up to $2,000.
- Retirement and pensions – You can exempt most retirement plans and pensions.
- Wages – You can exempt wages you earned 60 days before filing for bankruptcy if you have not received them yet.
- Life insurance – Exemptions are available for life insurance that benefits your spouse or children. You can also exempt employee group life insurance.
- Child support, alimony, and separate maintenance – If you can prove the alimony, separate maintenance, or child support you receive is necessary, you could exempt those payments.
Understanding the Chapter 7 Bankruptcy Process
First, you must determine whether you meet the requirements to file for Chapter 7 bankruptcy by applying the means test. There are strict income limits based on the median income level in North Carolina. If you qualify, you can proceed with the filing by completing the steps below:
- Complete a pre-bankruptcy credit counseling course and provide the certificate to the court
- File your petition with the bankruptcy court, which automatically stops collections actions from creditors
- File the required documents to show your financial standing, such as income, assets, and liabilities
- Submit a copy of your most recent tax return
The bankruptcy court will appoint a trustee. The trustee is responsible for managing your case and liquidating your non-exempt assets. After selling non-exempt assets, the trustee can pay back the debts you owe to unsecured creditors. They will hold a “341 meeting” between 21 and 40 days of your filed petition. You must attend this meeting with your attorney and answer questions under oath regarding your financial situation.
If the court discharges your debt, you won’t have to repay the money you owe. Additionally, creditors can’t contact you anymore or pursue action against you.
If you face overwhelming debt that you can’t afford to pay, contact Bradford Law Offices immediately. Your Chapter 7 bankruptcy lawyer in Wake Forest will review your finances and determine whether you qualify for Chapter 7 bankruptcy. We understand the stress you’re under and will tirelessly work to help you resolve your debts, so you can move forward to a more financially secure future.