Introduction
Filing for bankruptcy can be a daunting and complex process, but it can provide individuals and businesses with a fresh start and a chance to regain financial stability. If you find yourself in a situation where bankruptcy seems like the best option, it’s important to understand the process and requirements specific to your state. In this article, we will dive into the details of how to file for bankruptcy in North Carolina (NC).
Types of Bankruptcy
Before diving into the process, it’s essential to understand the different types of bankruptcy available. In the United States, the most common types are Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy: Also known as liquidation bankruptcy, Chapter 7 involves the sale of non-exempt assets to repay creditors. It is typically a quicker process, usually lasting around three to six months, and is available to individuals and businesses.
Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as reorganization bankruptcy, involves creating a repayment plan to pay off debts over a period of three to five years. This type of bankruptcy is generally suitable for individuals with a regular income who want to keep their assets.
Eligibility Requirements
To file for bankruptcy in NC, you must meet certain eligibility requirements. These requirements are determined by the means test, which evaluates your income and expenses to determine if you qualify for Chapter 7 or Chapter 13 bankruptcy.
For Chapter 7 bankruptcy, your income must be below the median income level for a household of your size in North Carolina. If your income exceeds this threshold, you may still qualify based on your disposable income after deducting certain expenses.
For Chapter 13 bankruptcy, you must have a regular source of income and your unsecured debts must be below a certain limit. Additionally, you must not have filed for Chapter 7 bankruptcy in the past four years or Chapter 13 bankruptcy in the past two years.
The Filing Process
Once you have determined your eligibility and decided on the appropriate type of bankruptcy, you can begin the filing process. Here are the general steps to file for bankruptcy in NC:
1. Credit Counseling: Before filing for bankruptcy, you must complete a credit counseling course from an approved agency. This course helps you understand the implications of bankruptcy and explore alternatives.
2. Gather Required Documents: To file for bankruptcy, you will need to gather various documents, including your income records, tax returns, a list of your assets and liabilities, and any contracts or leases you may have.
3. Complete Bankruptcy Forms: Next, you will need to complete the necessary bankruptcy forms, such as the petition, schedules, and statements. These forms require detailed information about your financial situation.
4. File the Forms: Once you have completed the forms, you must file them with the bankruptcy court in your district. You will also need to pay the filing fee, which is currently $335 for Chapter 7 and $310 for Chapter 13.
5. Attend the Meeting of Creditors: After filing, you will be required to attend a meeting of creditors, also known as a 341 meeting. During this meeting, the bankruptcy trustee and your creditors may ask you questions about your financial affairs.
6. Complete Financial Management Course: Before receiving a discharge, you must complete a financial management course from an approved agency. This course provides guidance on budgeting and managing finances.
Conclusion
Filing for bankruptcy in North Carolina can be a complex process, but understanding the steps and requirements can help make it more manageable. Whether you are considering Chapter 7 or Chapter 13 bankruptcy, it’s important to consult with a qualified bankruptcy attorney to guide you through the process and ensure you meet all the necessary requirements.
References
– United States Courts: www.uscourts.gov
– Legal Aid of North Carolina: www.legalaidnc.org
– North Carolina Bankruptcy Court: www.ncmb.uscourts.gov
