The North Carolina Bankruptcy Process: A Step-by-Step Guide
Filing for bankruptcy can feel overwhelming, but for many, it’s a necessary step toward financial relief. If you’re struggling with debt in North Carolina, understanding the bankruptcy process can help you feel more in control and prepared for what’s ahead. This step-by-step guide explains how bankruptcy works in North Carolina and what to expect if you decide to file.
Step 1: Determine If Bankruptcy Is Right for You
Bankruptcy may not suit everyone. That is why the initial step in the process is to assess if it’s the appropriate remedy for your financial circumstances. Certain debts, including child support, most student loans, and specific tax liabilities, cannot be eliminated in bankruptcy. However, if you find yourself swamped with credit card debt, medical bills, or personal loans, bankruptcy may offer the fresh start you need.
Consider consulting with an experienced and knowledgeable bankruptcy attorney in North Carolina when making this decision. These legal professionals can help you examine all potential debt relief options and determine the right path for you.
Step 2: Choose Between Chapter 7 and Chapter 13 Bankruptcy
In North Carolina, people typically file for either Chapter 7 or Chapter 13 bankruptcy. However, the chapter you file under will usually depend on your income, assets, and financial objectives. In addition, to assess eligibility for Chapter 7, North Carolina adheres to the federal means test, meaning those with higher incomes may need to file for Chapter 13 instead.
Step 3: Complete Credit Counseling
Before filing for bankruptcy in North Carolina, it is necessary to finish a credit counseling course offered by a provider sanctioned by the U.S. Trustee’s Office. This requirement ensures you know all potential debt relief options before taking further steps.
Step 4: File the Bankruptcy Petition and Financial Documents
Once you have determined the appropriate bankruptcy chapter for your situation, the next step is to file a bankruptcy petition with the North Carolina bankruptcy court. This petition includes:
- A complete list of your debts, income, and assets
- Recent tax returns
- Pay stubs or proof of income
- A financial statement detailing your expenses
After you file, an automatic stay stops creditors from making calls, suing, garnishing wages, or continuing collections actions.
Step 5: Attend the 341 Meeting of Creditors
Approximately a month after you file, you will participate in a creditors’ meeting, known as the 341 meeting. This is a short hearing during which the bankruptcy trustee assigned to your case will inquire about your financial circumstances and the documents you have submitted.
While creditors are allowed to attend, they typically do not. A skilled North Carolina bankruptcy attorney can help you prepare for this meeting, ensuring everything goes smoothly.
Step 6: Complete the Debtor Education Course
To discharge your debts, completion of a debtor education course is required. This financial management course offers advice on budgeting, responsible credit usage, and financial planning, aimed at helping you avoid future financial issues difficulties.
Step 7: Receive a Bankruptcy Discharge
In Chapter 7 filings, the court generally approves a discharge within three to four months, erasing qualifying debts. In comparison, Chapter 13 discharges happen only after the repayment plan is completed, taking about three to five years. However, after your bankruptcy discharge, creditors cannot pursue payment for the discharged debts, enabling you to start fresh with your finances.
Learn More About the Bankruptcy Process, Contact Stephen E. Robertson Today
Taking on the bankruptcy process in North Carolina can be challenging, but you do not have to face it alone. At the Law Office of Stephen E. Robertson, we have assisted numerous individuals and families in finding relief from debt and rebuilding their financial futures.
If you are considering bankruptcy, contact our office today for a consultation. We can assess your financial situation, clarify your options, and support you throughout every step of the process.