Do I Have To Get Credit Counseling Before I File For Bankruptcy
Yes. Before you file for bankruptcy, you must take a brief credit counseling class and get a certificate proving that you have done so. If you are planning to file jointly with your spouse, you can both attend the same counseling session, but each of you must get a separate certificate. You can usually take a class online or over the phone.
The counseling class usually costs around $50 to $75 or less. However, federal bankruptcy law states that credit counseling agencies must provide credit counseling services without regard to a clients ability to pay and must disclose the possibility of a fee waiver or fee reduction before beginning the counseling session.
Many critics of federal bankruptcy law see the credit counseling requirement as a bureaucratic obstacle for already-desperate debtors. Perhaps so. But try to make the most of your 90-minute session by getting as much free information as you can. You may be able to use it as a way to get a second opinion about your financial situation, and to gauge whether bankruptcy is, indeed, the right choice for your situation.
For more information, see the the from the U.S. Department of Justice. When you’re ready to sign up for a counseling class, you can use this list of court-approved credit counselors.
Once you’ve filed, you’ll need to take another online class — a “Debtor Education” class — before you can receive your final order discharging your debts.
Do I Qualify For Bankruptcy Bankruptcy Means Test Standards For Catawba County
You may be surprised to learn that whether you can file for bankruptcy can come down to which state and county you live in.
Which type of bankruptcy you qualify for depends, in part, on whether your annual income is more or less than the North Carolina median income. Before looking at numbers and formulas, however, you should be familiar with the two main types of personal bankruptcy:
North Carolina Bankruptcy Exemptions: Will I Lose My Property
Each state, as well as the federal government, has enacted certain laws that allow debtors to protect property from creditors and, when a bankruptcy case is filed, from the trustee. The State of North Carolina is no exception, although its one of a handful of states that allows debtors to only claim state exemptions and not choose from the list of federal exemptions.
Under the North Carolina homestead exemption, debtors can protect up to $35,000 of equity in their primary residence. If you are married and filing a joint case with your spouse, you can double the exemption to protect $70,000 of equity in your home.
How exactly does the homestead exemption work? It applies to equity.
For example, if you own a home worth $200,000 with a mortgage of $150,000, you have $50,000 of equity accumulated in your home. If you file a joint Chapter 7 case in North Carolina, your home would be entirely off-limits to the bankruptcy trustee because all of your equity is exempt. In the scenario above, you could file for Chapter 7, discharge all of your debts, and keep your family home. It is important to keep in mind however, that filing for bankruptcy does not give you a free home. In order to retain ownership of your home after you file for bankruptcy, you will still need to pay the mortgage as you have in the past. Failure to do so can result in your lender initiating a foreclosure action.
|Most are exempt under federal/state law|
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How Farmer & Morris Law Pllc Can Help Your Bankruptcy Case
Filing for bankruptcy can be stressful and overwhelming, especially for those unfamiliar with how it works. The legal team at Farmer & Morris Law, PLLC, represents individuals and small businesses in Marion with Chapter 7 and Chapter 13 bankruptcy cases. Our team also handles Chapter 11 reorganization bankruptcy and Chapter 12 bankruptcy for family farmers.
Our lawyer can review your situation and determine which type of bankruptcy is best for your situation. We will also:
- Protect your rights during the bankruptcy process
- Advise you on a financial strategy for your situation
- Ensure you meet the requirements for a bankruptcy filing
- Review your petition and other paperwork to ensure it is filled out correctly
- Keep you on track to meet critical deadlines in your case
- Represent you in court hearings
- Help you protect your assets and money
Below, we explain the different types of bankruptcy that could apply to your situation. If you have any questions, we would be glad to answer them during a free consultation.
Filing Motions & Responding To Creditor Objections
$0 to $200
Depending on your circumstances these are two things you may or may not need to do.
Filing motions with the court. If creditors’ have placed claims on your property you may be able to have them removed by filing some extra paperwork.
Responding to objections. Your creditors or the bankruptcy trustee will have a certain number of days to object to statements on your forms. You may respond before the court has a hearing on the matter. Depending on the objection you may need to hire a lawyer to respond effectively.
Tip: If you are hiring an online service to prepare your bankruptcy papers, be sure to ask whether the standard fee includes filing motions for lien avoidance, or responding to the trustee’s or a creditor’s objection.
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How To File For Bankruptcy Without A Lawyer In Cary Nc
If youre dodging collection calls and throwing away bills you know you need to pay, you may consider filing for bankruptcy without a lawyer. After all, if you are filing for bankruptcy how could you afford an attorney?
Filing for bankruptcy can be a useful tool you can use to restructure your debt, stop the stressful calls, and prevent creditors from taking actions such as lawsuits, repossessions, garnishments, and foreclosure.
Once youve decided that bankruptcy is the right financial option for your situation, you may see online resources describing how you can file for bankruptcy without a lawyer.
This is referred to as filing pro se, which is a Latin legal term meaning youre representing yourself. Lawyers cost money, but filling out forms is free. The choice seems sensible. After all, the point of bankruptcy is to recover financially.
Print Your Bankruptcy Forms
For the moment, the North Carolina bankruptcy court does not allow folks who don’t have a lawyer to file their bankruptcy forms online. Instead, you have to bring a complete paper copy of your documents to the courthouse when filing bankruptcy in North Carolina. If you have your bankruptcy forms saved in a number of different PDF files on your computer, make sure to keep track of everything as you print it, as all the pages will look very much alike. Even though this is a legal proceeding, make sure you print your forms on regular sized paper , one page per sheet. Don’t, for whatever reason, print double-sided. Since your original signature must appear on your forms, make sure to sign everything that needs to be signed. If you want, you can print a second copy of everything and ask the clerk to stamp it with the case number assigned to your Chapter 7 bankruptcy in North Carolina.
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Figuring Out If Youre Eligible For Chapter 13
You may qualify for Chapter 13 bankruptcy if you have a steady income and your debts are worth less than the dollar amounts set by federal bankruptcy law. In 2019, the amounts are:
- $1,257,850 of secured debt.
These amounts are adjusted every few years and set out in 11 U.S. Code, Section 109.
In addition, to qualify for Chapter 13, you must have filed your state and federal income tax returns for the past four years.
Choosing The Right Bankruptcy Chapter For You In North Carolina
Most people file either Chapter 7 or Chapter 13. If you don’t know the differences between the two, you’re not alone. The short explanation below and our handy Chapter 7 versus 13 chart will help clear things up.
Chapter 7 bankruptcy.Chapter 7 is often a bankruptcy filer’s first choice for several reasons. It’s quickit only takes a few months to complete. And it’s cheapyou don’t pay anything to creditors. It works well for those of us whose property consists of the essential items needed to live and work.
People with more assets could lose them, however, especially if they own unnecessary luxury items. For instance, you might have to give up your RV, baseball card collection, or timeshare in the Bahamaseven your house or vehicle if you have too much equity in it or you’re behind on the payments. Unlike Chapter 13, Chapter 7 doesn’t have a payment plan option for catching up on late mortgage or car payments. So you could lose your home or car if you’re behind when you file.
Caution for businesspeople. Be sure to learn about the ins and outs of small business bankruptcies. The principles discussed apply to consumers only.
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Federal Law Governs The Bankruptcy Process
Bankruptcy is a legal procedure that helps people and businesses that cannot repay their debts. When a person or business declares bankruptcy, creditors must immediately stop seeking to collect debts until the person or business figures out their repayment plan. Repayment could mean they will have to liquidate their assets or use another approach to pay their debts.
Bankruptcy is governed by federal laws, so federal courts preside over all bankruptcy cases. This means that any bankruptcy case in North Carolina cannot be filed in state court. However, North Carolina laws do come into play, such as the states formal property exemptions in Article 16 of the North Carolina code . These exemptions can help you keep your home, vehicle, and other assets you have.
The Benefits Of Chapter 13 Bankruptcy
If you are concerned about holding on to your home, car, and other property, Chapter 13 bankruptcy might be the best option for you. If your debt load is temporarily overwhelming, Chapter 13 bankruptcy can allow you to:
- Restructure your debt into a manageable amount
- Reorganize non-dischargeable debt like taxes
- Repay some of your debt in smaller amounts over time, and receive forgiveness of the remaining debt.
Your income will be considered in a Chapter 13 bankruptcy filing. Our lawyer may be able to help you:
- Organize your debts
- Establish a workable payment plan
What Are Bankruptcy Exemptions
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
Unless otherwise noted, all law references are to the & nbsp General Statutes of North Carolina.
- Real or personal property used as a residence, including co-op, up to $35,000 $60,000 if 65 or older, the property is owned as tenants by the entirety or joint tenants with right of survivorship, and spouse has died Tenancies by the entirety exempt without limit as to debts of one spouse
- Motor vehicle up to $3,500 health aids clothing, household goods, furnishings, appliances, books, animals, musical instruments and crops up to $5,000 total, plus additional $1,000 per dependent up to $4,000 total personal injury and wrongful death recoveries for a person you depended upon college savings accounts that were established under 26 U.S.C. & sect 529 up to $25,000. There are some contributions within the prior year that are excluded.
- Burial plot up to $18,500, in lieu of homestead.
- Earned but unpaid wages received 6O days before filing for bankruptcy.
- Public assistance under work first program.
- Aid to blind.
- $5,000 of unused homestead or burial plot exemption
- $500 of any personal property
Mandatory Debtor Education Debt Management Course
$0 to $75
As if you don’t have enough hoops to jump through, when you’ve completed all the other parts of your bankruptcy, you still don’t get that magic piece of paper called the “discharge” until you complete a course in debt management.
This is yet another requirement motivated by Congress’s frequently mistaken assumption that people who file for bankruptcy wouldn’t be broke if they weren’t so careless with their money. Chances are, you really are brokeand not because you’re irresponsibleso you should see if you qualify for free or reduced rates.
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Do I Qualify For Bankruptcy
To qualify for Chapter 7 bankruptcy, you must show that either:
- your income is below North Carolinas median income for your family size, or
- your income and expenses, calculated together, leave you unable to pay your debts. This is determined under a complex formula called the bankruptcy means test.
If you don’t qualify for Chapter 7, you may still qualify to file under Chapter 13. To qualify for chapter 13, your debt must be under the limit set by the bankruptcy code and you must be current on your tax filings for the last four years.
Where Do I File For Bankruptcy In Catawba County Nc
Where to file your bankruptcy case depends on where you live and on whether you have a business close to home. Usually, you’ll file in the federal district court closest to where you’ve lived for the past 180 days . But if you run a business in a different district and most of your property is located there, you may have to file in the federal court serving that location.
The reason behind these filing rules is that the bankruptcy court wants the person overseeing your casecalled the bankruptcy trusteeto be able to easily find, evaluate, and, if necessary, sell your property.
If you’ve moved recently, you may have to file at the bankruptcy court serving the county where you used to live. That will depend on where the greater portion of your property has been for most of the past 180 days. For example, if you lived in Oregon for most of your life, but moved to California a month ago, you’ll file in Oregon because you lived there for 150 of the past 180 days.
You can handle most interactions with the court, including filing your bankruptcy forms, by mail. However, you will need to visit the courthouse in person at least once, for a meeting with the bankruptcy trustee.
Requirements To File Chapter 7 Bankruptcy In North Carolina
Submitted by Rachel R on Tue, 02/26/2019 – 9:25am
Can you file Chapter 7 bankruptcy? Rules to know
Image Source: Flickr User Alan Levine
Its 2017 and a good time to think about doing some cleaning in your life. Chapter 7 bankruptcy may help you. The new year is the perfect time to reorganize your home, your life, and your finances. If youre struggling with debt you cant afford, living paycheck to paycheck, and being hounded by debt collectors, bankruptcy might be the best way out of your financial mess.
Most people dont like to admit that theyre in over their head with debt. Saying youre in too much debt is a hard thing to acknowledge but can be the best thing for you. Once you admit the debt is overwhelming, you can look for a solution. For many North Carolina consumers, Chapter 7 bankruptcy is the perfect solution to wipe out debt and get a clean slate.
Not everyone will qualify for Chapter 7, but if you can, it represents the chance for sweeping debt relief. Here are five requirements for you to file Chapter 7 North Carolina bankruptcy.
#1 Income Requirements
If you earn less than the median income for North Carolina, youre on your way to filing Chapter 7. For a household of two people, income less than $50.7k qualifies. For three people, its $55k and for a household of four, the income level is $63.7k. If you earn more than this, you might still qualify for Chapter 7. See #2 below.
#2 Pass the Means Test
#3 Limits on Prior Bankruptcies
#4 Recent Bankruptcies
How Chapter 7 Bankruptcy Works In North Carolina
For most people, the goal of Chapter 7 bankruptcy is to wipe out as much debt as possible. In legal terms, this is called having your debts discharged.
In exchange for your bankruptcy discharge, you must be willing to turn over any of your property that is not exempt under bankruptcy law. The bankruptcy trustee in charge of your case will liquidate the property to pay as much as possible to your creditors thats why Chapter 7 is often called liquidation bankruptcy.
This article covers:
- debts you owe under a divorce or separation agreement
- fines, penalties, or criminal restitution payments, and
- any debts related fraud youve committed or injuries youve caused.
In addition, you often cant discharge debts that are secured by a particular piece of property. For example, if you have a car loan, the lender may be able to repossess your car. If you have a home loan and cant show that your home is exempt under bankruptcy law, the lender may have the right to foreclose your mortgage.
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Chapter 7 Vs Chapter 1: Which Should I File
When it comes to filing for bankruptcy, there are generally two options to choose amongst – Chapter 13 bankruptcy is a reorganization whereas Chapter 7 bankruptcy is a liquidation. Choosing which one is right for you depends on your income level and what assets or property you hope to keep. Chapter 13 bankruptcy is generally used by debtors who want to keep secured assets, such as a home or car. In the bankruptcy filing, debtors do not have to lose their secured assets. A chapter 13 bankruptcy allows the debtor to make a repayment plan, making up their overdue payments over the course of 3-5 years and reinstating the original agreement. Also, a debtor may be able to keep valuable nonexempt property with Chapter 13.
However, for the vast majority of individuals who simply want to eliminate their heavy debt burden without paying any of it back, Chapter 7 provides the most attractive choice. This chapter erases things like credit card debt, medical bills, and most civil judgments, though it is not guaranteed that you will be able to keep your expensive property.