Individuals typically file either chapter 7 or chapter 13 bankruptcy cases. There are multiple factors to consider when selecting which chapter to file, including an individual's household income, assets, and the kind of debt they have. To protect against vehicle repossession or the foreclosure of a home, chapter 13 cases are often filed on an expedited bases - sometimes on the very day a client first walks in the door. All consultations are free and with an attorney. There is never any obligation to file a case. Contact us to schedule a consultation.
CHAPTER 7 BANKRUPTCY
In chapter 7, debtors receive a discharge of general unsecured debts. In exchange for this debt relief, a chapter 7 trustee liquidates any of the debtor's non-exempt assets and distributes the proceeds to their creditors. Though this can sound alarming, residences of North Carolina enjoy the benefit of a generous exemption scheme, which allows most debtors to retain their assets. Individuals whose debts are primarily consumer in nature may not qualify for chapter 7 if their household income (when examined in light of their household size and living expenses) appears too great.
CHAPTER 13 BANKRUPTCY
In chapter 13 cases, the range of debts that an individual is able to discharge or pay through a chapter 13 plan is much wider. Its scope includes the curing of mortgage arrears, interest rate reduction for vehicle loans, priority tax payments, the curing of child support or alimony arrears, and the discharge of non-support marital obligations. Additionally, if an individual is ineligble for chapter 7 relief (perhaps for income reasons) or chapter 7 is otherwise inhospitable (perhaps because of the expected liquidation of an asset), chapter 13 allows debtors to file a case and propose to pay their general unsecured creditors an amount over a five year period equal to what they would have received in chapter 7 or an appropriate amount based on an individual's disposable income.
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