Nearly 25,000 North Carolina residents filed for Chapter 7 bankruptcy last year. Due the increase in oil prices, the decrease in job availability and a general “seize up” the nation’s economy as a whole, thousands of North Carolina residents are looking for some relief.
Those struggling with unpaid medical bills, increased interest in credit card rates, mortgage loans, or any type of unpaid, unsecured debt can alleviate the worry and the trouble that debt causes by filing for a Chapter 7 bankruptcy. Since bankruptcy is a short process ranging from approximately six to eight months, many North Carolina residents have found that bankruptcy; Chapter 7 and other Chapters have helped them start over.
Filing Bankruptcy, Chapter 7 in North Carolina
Before you file for a Chapter 7 bankruptcy, it is in your best interest to speak to a local North Carolina attorney about your options. While it is possible for individuals to file bankruptcy on your own (called a pro se filing) it can get extremely complex and difficult. If you misfile any of your documents, it can result in an immediate dismissal or an accidental case of attempting to commit fraud. Save yourself from potential legal problems and hire an experienced bankruptcy attorney.
Before you meet with your attorney you will be asked to bring some financial information to determine your asset and debt ratio. Typically you attorney will ask you to bring the following documents:
- Last six months of your pay stubs (for you and your spouse)
- Last year’s tax return
- A complete list of creditors
- Paperwork regarding any judgments or liens
If you have a pending foreclosure or another imminent financial issue, you should mention the current status of these issues with your bankruptcy attorney right away. An attorney may be able to immediately stop these issues as long as you provide the right information in a timely manner.
The Requirements to File Chapter 7 Bankruptcy
Before you rush off to your local North Carolina bankruptcy attorney, there are a couple of requirements every debtor must meet in order to get debts successfully discharged. Since the Bankruptcy Reform Act was put into place in 2005, all debtors must fall at or below the median income level for the state they live in. Those wishing to file may still qualify for a Chapter 7 bankruptcy if they exceed the income level but they will be required to pass the means test. This mathematical procedure uses your current asset and debt information to determine if Chapter 7 is the best option for you. If you do not pass the means test your attorney may recommend a Chapter 13 bankruptcy.
The median income level for North Carolina is as follows. Please note that these income levels do change annually. Contact your attorney for the most recent average income levels.
- Single individual filing: $37,781
- Family of two: $50,630
- Family of three: $55,468
- Family of four: $67578
- More than four family members: Debtors are required to add $7,500 per additional family member to the average income base.
Credit Counseling Requirements
Once you know that you qualify for bankruptcy, Chapter 7 or otherwise, there is one other basic requirement other than attending a short bankruptcy hearing with your attorney that you will need to accomplish. Federal law mandates that each individual filing for bankruptcy must take two debtor’s education counseling courses during the time the debtor is involved in a bankruptcy. Your attorney will assist you in finding a reputable company and filing the information with the court.
The courses are short, lasting about an hour and a half and usually can be taken over the phone or on the Internet. You will need to take one before your attorney files your petition and one again after you file before your discharge. The purpose of the courses are to educate consumers about credit cards, managing money and handling finances.
North Carolina Residents Discharge Debt and Keep Their Assets
Bankruptcy wouldn’t be very beneficial to North Carolinians if they lost everything they have worked an entire life for in a bankruptcy filing. Bankruptcy laws have been put into place to protect some of the assets and property that debtors have. Called exemption codes or laws, using these codes allow debtors to withhold a certain amount of property exempt or withheld from bankruptcy proceedings. Some of the exemption laws for North Carolina include:
- House exemption: A primary residence up to $35,000 is exempt.
- Personal property: $500 of other property is exempt. (Cannot be used with home exemption)
- Vehicle: Up to $3,500 in value
- Professional Tools: Up to $2,000
- College savings plan: Up to $25,000
- Benefits – includes 100% of all following benefits or rewards:
- Crime victim’s compensation awards
- Fraternal Benefit Society benefits
- Group life insurance benefits
- Up to $20,000 in support allowance for a surviving spouse
- Employment security benefits
- Legislative retirement system benefits
- Disability income
- Workmen’s compensation
- Retirement benefits for all:
- City employees
- County employees
- State employees
- Law enforcement officers
- 100% of Aid is exempt for:
- Families with dependent children
- Aged or disabled persons
- Blind persons
- Miscellaneous Exemptions:
- 100% of specific individual retirement plans
- 100% alimony or child support payments
- 100% firemen’s pension benefits
- 100% employee security
- 100% annuities payable for services in the General Accounting Office
- 100% ERISA benefits
- 100% compensation for war risk hazards
- 100% wages of seamen while on voyage
Note that the amount and type of exemptions can change from year to year. The above list only shows a sampling of the different types of exemptions available. Your North Carolina bankruptcy attorney will help you decide which exemptions you qualify for.
Don’t let the economy define your life. Take control today, and get rid of your debts with a Chapter 7 bankruptcy.
North Carolina Bankruptcy Courts
United States Courthouse
100 Otis Street, Room 112
Asheville, North Carolina 28801-2611
Phone: (828) 771-7300
Charles R. Jones Federal Building
401 West Trade Street, Room 111
Charlotte, North Carolina 28202
Phone: (704) 350-7500
Federal Law Center
101 South Edgeworth Street, 1st Floor
Greensboro, North Carolina 27401-2219
Phone: (336) 358-4000
300 Fayetteville Street, Room 209
Raleigh, North Carolina 27601-1749
Phone: (919) 856-4752
1760 Parkwood Boulevard West, Suite A
Wilson, North Carolina 27893
Phone: (252) 237-0248
United States Courthouse
225 South Liberty Street, 1st Floor
Winston Salem, North Carolina 27101-5211
Phone: (336) 397-7785