What is bankruptcy?
Bankruptcy is a term used to define a federal court process that takes place when debtors are unable to repay their obligations. Simply put, bankruptcy allows debtors to eliminate or reorganize their debts under the supervision of a bankruptcy court.
Should I hire an attorney to help me with my bankruptcy?
Bankruptcy can be a complex process. If you have accumulated an overwhelming amount of debt, working with a bankruptcy attorney can help ensure you get the legal protection you deserve. The attorneys at Weaver, Bennett & Bland, North Carolina, are here to help you examine your options. We understand the stress bankruptcy can bring, and we want to help the process go as smoothly as possible.
How long does the bankruptcy process take?
- Chapter 7 bankruptcy takes four to six months to complete.
- Chapter 13 bankruptcy takes the same amount of time, but involves a three to five-year repayment plan.
How does bankruptcy work?
- In general, people file for bankruptcy after they suffer a major financial blow and can’t meet their debt obligations by any other means.
- When filing, you’ll need to demonstrate that you can’t repay your debts and also complete credit counseling with a government-approved credit counselor who will help you assess your finances and create a personal budget plan.
- You’ll also have to decide which type of bankruptcy you’ll file:
- Chapter 7 bankruptcy is designed primarily to eliminate most non-priority unsecured debts such as credit card and medical bills.
- Chapter 13 bankruptcy allows you to keep all of your property and you pay back some or all of your debts through a repayment plan. Chapter 13 is called a reorganization bankruptcy because it allows debtors to restructure their debts and catch up on payments.
What happens when you file for bankruptcy?
Under Chapter 7…
You’ll receive an automatic stay, which is essentially a block that keeps creditors from trying to collect.
Under Chapter 13…
You must give the bankruptcy court information on your affairs, liabilities, and assets. Then creditors must approve your reorganization statement.
When should you declare bankruptcy?
- There are consequences associated with filing for bankruptcy, so you should consider bankruptcy only as a last resort.
- If you can see no reasonable way to keep up with your payments and cancel your debt, it’s time to consider filing for bankruptcy.
- If you’re able, it’s often better to file earlier in the year than later.
- This is because your trustee will be able to claim some of your coming years non-exempt tax refund.
Timing of your bankruptcy filing is extremely important, and you should speak with an experienced bankruptcy lawyer about when your filing should take place.
Your Business Law Attorneys & Advocates:
Matthew M. Villmer
William G. Whittaker
To learn more about filing bankruptcy in North Carolina, contact WBB to schedule your consultation.