RECENT CHANGES HAVE BEEN MADE FOR FILING BANKRUPTCIES. STAY TUNED FOR UPDATES!
When considering bankruptcy in Chapel Hill or Durham, will my major assets be foreclosed upon or repossessed?
Understandably, most people considering bankruptcy would not want to be homeless or without transportation. Some may also be concerned about other assets, such as a recreational vehicle or boat. In general, the law allows people to keep a significant amount of property, even if that property represents secured debts. Doing so may require filing under Chapter 13, which incorporates a repayment plan (often at significantly reduced amounts), rather than under Chapter 7, which discharges all debts. If you have been notified of a potential repossession or foreclosure, it is vital that you act quickly! An experienced bankruptcy attorney can analyze your situation and recommend the best solution for your particular circumstances.
What will happen to my credit?
Contrary to what many people think, a bankruptcy filing under either Chapter 7 or 13 may be a positive step toward re-establishing credit. This is particularly true for those who are already over-extended, or whose credit report shows delinquencies, repossessions, foreclosures, or judgments. Even after filing for bankruptcy protection, such things as buying a new car or purchasing a home may be possible, depending upon individual financial circumstances.
Will I have to go to court?
About four weeks after filing a bankruptcy petition, a meeting will be held, notably including the petitioner, their attorney, and the bankruptcy trustee. This is commonly referred to as the “Meeting of Creditors.” As the name implies, creditors have the right to appear; more often than not, they do not exercise that right. Typically, the trustee will ask a few questions, based on the contents of the petition, and the entire process will be concluded within 10 minutes after a given petitioner’s name is called. Several of these meetings are generally scheduled for the same time frame, so there may be other people in the room, most of whom will be there because they, too, are petitioners. The Meeting of Creditors is a necessary formality, and should not be a cause for concern.
Am I still liable for past judgments and taxes?
A bankruptcy filing under Chapter 7 or 13 stays litigation and enforcement proceedings. What this means is that any pending lawsuit involving a money dispute against a petitioner can go no further, or, if judgment has been entered, enforcement of the judgment can go no further.
In terms of tax relief, a Chapter 7 filing can eliminate some older income taxes only. If other types of tax, or more recent income taxes are an issue, a Chapter 13 filing may be more advisable: It prevents IRS garnishment of wages, seizure of bank accounts, and other actions that could be taken against property to collect a tax debt. An experienced bankruptcy attorney can ease the process of weighing the alternatives.
How will this affect my loan co-signer(s)?
The effect of a bankruptcy filing on a co-signer depends on the type of filing undertaken. If a petitioner files under Chapter 7, a creditor could still move to collect from any co-signer on any loan. However, a Chapter 13 filing includes a payment plan, under which loan payments can often be reduced below what they would be without the intervention of the Bankruptcy Court. If a petitioner establishes and maintains current payments on their Chapter 13 Plan, co-signers are protected from adverse action by the petitioner’s creditors.
Browner Law is a debt relief agency, helping people file for bankruptcy relief under Title 11 of the U.S. Code, also generally known as the Bankruptcy Code. We help those that are considering this in the Chapel Hill, Durham and surrounding areas of North Carolina.