Do I Qualify for Bankruptcy Chapter 7 in Greensboro, NC?

In 2016, more than half of the total bankruptcy cases filed were Chapter 7, and from that, over 95% of filers had their debt discharged, making it the quickest, simplest, and most common bankruptcy type in Greensboro and elsewhere here in North Carolina. But that doesn’t mean that everyone can qualify. To see if you qualify for a North Carolina bankruptcy Chapter 7 in accordance with North Carolina bankruptcy laws, contact an experienced bankruptcy attorney like ours at Ivey McClellan.

Qualifying for Chapter 7 Bankruptcy in Greensboro, NC

Deciding to file for Chapter 7 bankruptcy as a Greensboro, North Carolina resident should not be taken lightly. It is a large undertaking, and you should first discuss your options with a licensed bankruptcy attorney. Here are some strong indicators to see if you might qualify for Chapter 7 bankruptcy in Greensboro, NC. 

• Your debts total more than half your annual income.
• Your monthly income is below the median level in your state.
• It would take five years or more to pay off your debt.
• Your debt interferes with other essential aspects of your life.
• You have little to no disposable income.

If you align with one or more of these indicators, you may be a strong candidate for Chapter 7 bankruptcy in accordance with NC bankruptcy laws. 

Here are some of the qualifiers for achieving discharged debt through this type of Greensboro bankruptcy filing:

Your Income Is Below or Meets the Threshold

In North Carolina, you must earn less than the median income for the state to qualify. For a household of two in Greensboro, NC, that means not exceeding $50,700. For a household of three, it is $55,000, and for a household of four, it is $63,700. If you exceed these income requirements, you are not automatically disqualified. You may then take the means test.

Passing the North Carolina Bankruptcy Means Test

The means test in North Carolina is a calculation of eligibility to see if you qualify for relief under a Chapter 7 bankruptcy filing. This generally seeks to absolve if you can at least pay off some of your debts, you should, and may be a better fit for a Greensboro Chapter 13 bankruptcy type. It works by comparing your income to how much other people in your state earn and then calculating your expenses. In total, the means test evaluates your secured and unsecured debt, expenses, income, and other costs of living here in Greensboro, NC to see if you can afford to pay off some of your debts through Chapter 13, or if you require the liquidation that Chapter 7 offers. 

Not Exceeding the Limits on Prior Bankruptcies

You can only file Chapter 7 bankruptcy once every eight years if it went all the way through to discharge. You also cannot file a Chapter 7 in Greensboro, NC if, within the last six years, you have filed a Chapter 13 bankruptcy that went all the way through to discharge. If you filed a Chapter 7 or Chapter 13 bankruptcy in North Carolina that did not go all the way to discharge, you may still be eligible, though you may have to wait an extended period, longer than 180 days.

Also, if any abuse or fraud allegations were filed against you in a prior bankruptcy case, you may be ineligible to file again. These may include violating a court order, failing to complete your required credit counseling, or if your Greensboro bankruptcy case was found to be fraudulent. We recommend you discuss past filings with your North Carolina bankruptcy attorney at Ivey McClellan to ensure you qualify for a new case.

Filing a Petition

If you fulfill the above regulations per bankruptcy laws in North Carolina, the debtor must file a petition with a local bankruptcy court here in Greensboro, NC. You must submit a financial statement, including records of assets, liabilities, income, expenses, and overall financial standing, plus any existing contracts or leases in the debtor’s name. A bankruptcy attorney at our Greensboro law firm can help you navigate the paperwork, ensuring you are completing each step as required by North Carolina.

Required Credit Counseling

Pre-bankruptcy credit counseling is required for all debtors. This involves a fee, and can often be completed online or over the phone. You must take and pass credit counseling offered by an accredited provider approved by the bankruptcy administration in the district here in Greensboro, NC. In North Carolina, your bankruptcy cannot be filed until after this step is completed successfully. 

Exempt vs. Non-Exempt Property in North Carolina Chapter 7 Bankruptcy

In the journey through Chapter 7 bankruptcy in North Carolina, understanding the distinction between exempt and non-exempt property is pivotal for Greensboro residents and other Southeasterners. Exempt properties are those you can keep; these include a homestead or burial plot (valued up to $35,000-$70,000), a motor vehicle (up to $3,500), and personal property (up to $5,000 with additional provisions for dependents). 

Also exempt are items like prescribed health aids, tools of trade (up to $2,000), and specific savings accounts (up to $25,000). Crucially, most retirement plans and pensions, as well as unpaid wages for work done 60 days prior to filing, are also considered exempt. Conversely, non-exempt properties could be sold off to pay creditors. This category typically includes luxury goods, non-necessary real estate, and valuable collections. It's essential to remember that exemptions can be complex, and applying them incorrectly can result in loss of property.

Preparing for Your Greensboro, NC Bankruptcy

Now that you have fully qualified for bankruptcy in North Carolina, it is time to file your petition in Greensboro and wait for your court date. In the meantime, there are some rules you should still abide by:

• Continue to make routine payments to your creditors, but avoid any large or unusual payments.
• Do not accrue any new debt in the months leading up to your filing. A new Greensboro, NC house or car payment will be viewed as fraud and is not to be forgiven or discharged.
• Be truthful and provide complete information regarding all of your debts, assets or accounts.
• Don’t dig into your retirement accounts. Keep these accounts safe, and do not use them to pay down your debts.
• Use common sense. Do not file for bankruptcy if you are about to receive an inheritance or a large sum of money. This money could be seized by the court to pay back your debt.

If you abide by all of these rules, it is very likely that you will not lose your Greensboro, North Carolina house, car, or other assets to the repayment of your debt. Occasionally luxury assets like a second home or a boat may be sold to pay off the creditors. 

Implications of Filing for Chapter 7 Bankruptcy in the Southeast

Embracing Chapter 7 bankruptcy in North Carolina and throughout the Southeast comes with both short-term and long-term implications. While it can offer immediate financial relief, the impact on your credit report can last up to 10 years. This can affect your ability to secure loans, mortgages, or even employment in some cases. However, this does not mean it's impossible to rebuild your credit. 

Proactive steps such as timely bill payments and sensible use of secured credit cards can aid in improving your score over time. Moreover, you may lose non-exempt property to liquidation, as previously discussed. While a North Carolina Chapter 7 bankruptcy offers a fresh start, it's a decision that should be made with comprehensive understanding and professional guidance.

Finding an Experienced and Reputable Bankruptcy Attorney in Greensboro, NC

If you are struggling with unsecured debts, the first step in your bankruptcy filing journey should be to consult with an experienced and reputable Greensboro bankruptcy attorney. At Ivey McClellan, our bankruptcy attorneys are well accustomed to the ins and outs of NC bankruptcy law and can help you get the results you are looking for with the least amount of damage.

Qualifying for Chapter 7 bankruptcy involves a lot of paperwork and is a lengthy and complicated proceeding. Let our experienced bankruptcy lawyers in Greensboro help you navigate the process. Call us, or set up an appointment to discuss your case.