7 Bankruptcy FAQs for North Carolina Consumers

Questions about bankruptcy? We've got the answers

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If you’ve got bills piling up you can’t pay and you’re dodging collections calls at home and work from your creditors, you need a solution. Borrowing to cover monthly payments and negotiating for settlements rather than full payoffs may buy you some time, but you likely need a more long-term solution to get you out of debt for good. Bankruptcy can offer you a fresh start but you may still be uncertain. Here are some bankruptcy FAQs to explain what you can expect:

#1 Will I lose everything I own if I file bankruptcy?

No! In fact, you’ll likely lose very little. In a North Carolina bankruptcy, you can protect equity in your home, vehicles and your personal property. This means that you can get rid of your debt without sacrificing everything.

#2 Will I be able to get rid of all of my debts in bankruptcy?

No – but you’ll be able to get rid of most of them. Unsecured debts such as credit cards, medical bills and home equity lines of credit (or second mortgages) will be able to be discharged. Car loans, mortgages, student loans and taxes are more complicated.

#3 What happens to my mortgage in a bankruptcy?

If you are current on your house payments, filing bankruptcy should not affect you. If you have less than $35,000 in equity or $70,000 if you’re filing bankruptcy as a couple, you should be able to keep your home according to North Carolina bankruptcy exemptions.

Bankruptcy answers about Chapter 7 debt relief

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#4 How does a bankruptcy affect a foreclosure?

Filing bankruptcy can stall a foreclosure and get rid of liens on your home beyond your primary mortgage but if you are behind on payments and can’t make them up, you’ll likely need a refinance or new deal from your lender to keep your home.

#5 Does my spouse have to file bankruptcy with me?

No and depending on your circumstances you may want to file individually. If most of your debts are in your name alone, an individual bankruptcy may be a better strategy, but if most of your debts are shared, filing as a couple will get you a cleaner fresh start.

#6 Will bankruptcy stop collections activity?

Bankruptcy will put an end to collections calls and letters, can shut down most garnishments and may even get you a refund on previously garnished amounts (depending on how much was taken, when and for what debts). It is illegal for creditors to pursue you after you file bankruptcy.

#7 How do I know if bankruptcy is the right solution for me?

A free consultation with a reputable North Carolina bankruptcy attorney is the first step. They will look at your income, debt and assets and tell you if you qualify for bankruptcy and why it may (or may not) be a viable solution for your circumstances.

Contact the law offices of John T Orcutt today to find out whether you’re eligible to file Chapter 7 or Chapter 13 bankruptcy and how it can offer you a financial fresh start.