What is a Chapter 7 Bankruptcy in Raleigh, NC?
What is a Chapter 7 Bankruptcy in Raleigh, NC? – You’re feeling overwhelmed by debt, you may be wondering. Chapter 7 bankruptcy is a legal process that gives people a chance to hit the reset button on their finances. At Cameron Bankruptcy Law, we guide you through this process, helping you understand how Chapter 7 bankruptcy can offer a fresh start by wiping out most of your debts.
Why Choose Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a popular option for several reasons:
- It’s faster: Compared to other types of bankruptcy, Chapter 7 can be completed in just a few months.
- It costs less: The fees are generally lower than other forms of bankruptcy.
- Credit rebuilding: After debts are discharged, you can start rebuilding your credit faster.
What is a Chapter 7 Bankruptcy in Raleigh, NC?
It is also called “liquidation bankruptcy.” In this process, some of your assets that are not protected (called non-exempt assets) may be sold, and the proceeds go toward paying off your debts. But don’t worry—there are many exemptions that protect important items, so you won’t lose everything. This allows you to eliminate unsecured debts, like credit card debt, personal loans, and medical bills, and begin rebuilding your financial life.
Who Can File for Chapter 7 Bankruptcy?
To qualify, your income must be below the North Carolina median income for your family size. If you make more than that, you may need to pass a means test to show that, after your expenses, you can’t afford to pay off your debts.
However, not everyone qualifies:
- If you’ve filed in the last 8 years, or completed a Chapter 13 case in the past 6 years, you may not be eligible.
A bankruptcy attorney can help you figure out if Chapter 7 is right for you.
How Does it Protect You?
One of the biggest benefits of filing is the automatic stay. This is a legal protection that goes into effect as soon as you file. Here’s what it does:
- Stops collection calls: Creditors must stop calling you immediately.
- Halts foreclosures and repossessions: Your home, car, and other assets are protected from being taken away.
- Ends wage garnishments: No more deductions from your paycheck to pay off debts.
- Prevents utility disconnections: Your electricity, gas, or water won’t be shut off while your bankruptcy case is pending.
What Debts Can Be Discharged?
A major benefit is that it can wipe out many types of unsecured debt, including:
- Credit card bills
- Medical bills
- Personal loans
- Certain tax debts
This gives you the opportunity to start fresh without the burden of most types of debt hanging over you.
What Debts Can’t Be Discharged?
While it wipes out a lot of debt, there are some obligations you’ll still be responsible for, including:
- Student loans (in most cases)
- Child support and alimony
- Criminal fines
These types of debts remain your responsibility even after filing for Chapter 7 bankruptcy.
What Property is Protected in North Carolina?
In North Carolina, certain assets are considered exempt, meaning they can’t be taken to pay off your debts. Exempt property includes:
- A vehicle (up to a certain value)
- Household items like furniture and clothing
- A portion of your home equity
- Tools you need for work
- Social Security benefits
This means you can keep many essential items even while going through the bankruptcy process.
What Property is Not Protected?
Non-exempt assets may be sold to pay creditors, which could include:
- Expensive collections (like stamps or coins)
- A second vehicle or vacation home
- Cash and investments
However, most people filing for Chapter 7 don’t lose significant assets because of the many protections available under North Carolina law.
Is Chapter 7 Bankruptcy Right for You?
Chapter 7 is designed to help individuals who are truly overwhelmed by debt. It’s a powerful tool to help you get rid of financial burdens and start fresh, but not everyone’s situation is the same. That’s why it’s important to work with an experienced attorney who can assess your unique financial situation and help you make the best choice.
How Does the Chapter 7 Bankruptcy Process Work?
Here’s a quick overview of the Chapter 7 process:
- Means Test: This determines if your income qualifies you for Chapter 7.
- Credit Counseling: You’ll complete a short credit counseling course.
- Trustee Appointment: A trustee is appointed to handle your case.
- 341 Meeting: You’ll meet with your creditors and the trustee to discuss your finances.
- Debt Discharge: Once the case is complete, most of your debts will be discharged, giving you the fresh start you need.
Need Help? Call Cameron Bankruptcy Law Today!
Is it right for you? We’re here to help! At Cameron Bankruptcy Law, we’ve helped countless individuals and families across Raleigh, Durham, Cary, and surrounding areas find the financial relief they need. Contact us today for a free consultation and take the first step toward a fresh start!
