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Filing a North Carolina Bankruptcy

Bankruptcy Act and Credit Counseling of 2005
2005 brought the passage of the Bankruptcy act where by all debtors (individual and not business debtors) filing bankruptcy from 2005 forward are required to receive credit counseling during the immediate 6 months leading up the the official filing to obtain bankruptcy relief along with a financial management instruction program after filing.

North Carolina Means Test
Under the 2005 Act, your income as well as your expenses are to be analyzed to determine whether Chapter 7 is allowable or whether a person will be required to file Chapter 13. Courts compare your average income over the previous 6 months leading up to filing against North Carolina’s median income. For those whose income is at or below the state’s median, they may elect to file Chapter 7 bankruptcy in NC. However, for those whose income is over the NC median income, subsequent requirements under the North Carolina bankruptcy means test need to be checked in order to find out whether you may elect to still file Chapter 7  bankruptcy or whether you’ll be required to file a North Carolina Chapter 13 Bankruptcy.

Filing Chapter 7 will still be possible and even likely, if you would not be able to pay at least $6,000 spread over the next 5 years (which is broken down to essentially $100 per month for the next 5 years.) This $6k would be paid toward creditors who are unsecured and who you own money to currently. On the flip side, if you will be able to pay a minimum of $10,000 across the coming 5 years (totaling out to be $166.67 each month) then you request to file a North Carolina Chapter 7 Bankruptcy is unlikely to be accepted by the court.

For those people whose incomes is such that the amount they could repay over the coming 5 years lies between $6,000 and $10,000, an additional and more complex mathematical bankruptcy calculation is employed in order to decide if you may file Chapter 7 successful or whether you will be required to file chapter 13 bankruptcy in North carolina. For example, if you can pay 25% or higher on your unsecured debt, once again, a Chapter 7 filing is unlikely to be accepted. And if you cannot cover a minimum of 25% on any unsecured debt in your name, Chapter 7 would conversely be likely to succeed.

Necessary Paperwork
To start filing bankruptcy in North Carolina, you’ll need to start by itemizing current income. Additionally, you would need to track down all of your financial transactions which are major and which occurred over the previous 2 years prior to filing. Next you would need to calculate out your living expenses in each month. Then you would total your secured as well as your unsecured debts. Next you would add up your property which refers to anything you own whether it is actual real estate property or other physical and other types of property which have monetary value. Tax returns should then also be obtained or gathered, documenting the prior 2 years leading to the bankruptcy filing. Next, real estate deeds which you own should be gathered along with your vehicle titles, along with the loans associated.

How to File Bankruptcy in North Carolina
After having gathered these documents and this information about your budget, you’ll need to compare your property (once again, referring to all possessions regardless of whether it is real estate property), and compare it according to the North Carolina or alternately you may use the federal exemptions list. exempt from seizure based on the North Carolina bankruptcy property exemptions.

Fees for filing Chapter 7 are $274. Although this fee cannot be waived, there are situations where it may be allowed in monthly or other installment payments. Additionally, the fees for filing Chapter 13 bankruptcy are $189 in North Carolina. Once again, these fees may not be waived.

North Carolina Automatic Stay

After you’ve filed paperwork with the court, immediately an automatic stay take effect on your behalf. This stops creditor actions immediately and they are prohibited from that time forward from any direct contact or communication directly or indirectly with you. Any action they take whether direct or implied which constitutes any type of placing a claim against any of your property are prohibited by law. Foreclosure proceedings cease, and in the case of having filed a Chapter 13 bankruptcy, plan payments also start according to the specific dates in the plan from that time forth.

North Carolina 341 Creditors Meeting

About one month subsequent to filing bankruptcy, the bankruptcy trustee calls an initial meeting of the creditors, and you are required to attend as the debtor. Creditors generally do not attend Ch. 7 bankruptcy meetings. In the case where money is still available or in your possession which is not exempt or which may possibly be called into question or fought over by creditors, they may attend the 341 meeting with regards to a Ch. 13 bankruptcy meeting in North Carolina. Creditors may place objects which are overruled or discussed and resolved in some sort of compromise brokered or pushed along by the trustee.

This North Carolina 341 creditors meeting is fast and most often lasts just a few minutes. Any non exempt assets would be turned over to the trustee during this meeting, who sells or attempts to sell this property and then to pay it out in the form of financial proceeds to creditors. Trustees as well as creditors may challenge your right to discharge for a period of 60 days and if there are no challenges, 3-5 months later you’ll receive notice that your debts have been discharged except where otherwise noted or no exempt.

Property Exceptions Specific to North Carolina

Homestead

  • $35,000 or less of real and/or personal property specifically used for a residence.

Wages

  • 60 days worth of wages or other earnings may be exempted if they are necessary for support of self and family.

CARS

  • A single vehicle valued at $3,500 or less.

Personal Property

  • $5,000 or less value of property, less any amount which has been claimed via the homestead exemption.
  • $5,000 or less, plus and additional $1,000 worth of property per each dependents to the amount of $4,000 in household furnishings, clothing, household goods, books, animals, appliances, crops and/or musical instruments.
  • $2,000 or less in value of tools and other professional items.

Hiring a Bankruptcy Lawyer in ND

Who Can File Bankruptcy in North Dakota?

In order to become eligible for bankruptcy relief in the State of North Dakota, you will need to meet all of the requirements below.  If you fail to meet even a single one of these eligibility requirements, you may be unable to file bankruptcy in the near future.

-Own property in, operate a business in, or reside in the State of North Dakota

-Have debts which you cannot pay

-Have attended an approved credit counseling program

In addition to these requirements, you will also need to prove that your annual income for the previous year was less than the state average if you wish to file for Chapter 7 bankruptcy.  If your income is above the state average, you will only be allowed to file for Chapter 13 bankruptcy.

What Do I Need To Know Before Filing For Bankruptcy in North Dakota?

In 2005, the federal government passed the largest bankruptcy reform act in the country’s history.  As a result of this reform act, many of the laws which govern bankruptcy proceedings have changed.  In order to ensure you are able to easily navigate this new system, it is vital that you seek the counsel of an experienced attorney.

What Type of Debts Can Be Discharged As Part of a Bankruptcy Proceeding in North Dakota?

In order for a debt to be discharged as part of a Chapter 7 bankruptcy settlement, the debt must be classified as an unsecured debt.  While the classification of unsecured debts will cover the majority of your debts, it will not cover some of your most expensive debts such as a mortgage.  This is because unsecured debts are defined as any debt which does not make use of collateral in order to secure the debt.  Since mortgages and car loans make use of collateral in order to secure the debt, these debts will not be discharged as part of your bankruptcy settlement.  In some cases, you may be able to work out payment arrangements with your creditors in order to keep the property associated with a secured debt if you are able to bring those accounts into a current standing.

Will I lose my house and car if I file for bankruptcy in North Dakota?

Every state has their own set of property exemption laws.  These laws are designed to allow you to protect a certain portion of your assets from being seized to pay your creditors.  In North Dakota, those property exemption laws are as follows:

-Homestead exemption of up to $80,000

-Up to $1,200 in equity in a single motor vehicle (this exemption is raised to $32,000 for disabled people utilizing a modified motor vehicle due to disability)

-All family pictures and religious materials not exceeding $100 in value

-All other personal property not to exceed $5,000

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