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BANKRUPTCY IN NORTH CAROLINA

Bankruptcy inherently carries uncertainty and fear as to what happens next for yourself, your property, and perhaps your business. We help our clients through this difficult process to help them get the best possible outcome.

BANKRUPTCY

is a scary word for a lot of people, but it doesn’t need to be. Nearly a million Americans and tens of thousands of businesses use the Bankruptcy process every year. Most people that find themselves considering Bankruptcy are not in their financial position because of poor financial planning or poor work ethics, nor are they looking for a free handout or looking to take advantage of the system. A 2019 study in the Journal of American Health found that over 2/3 of Bankruptcies are caused by Medical debt. In fact, if you look at the top 5 causes of bankruptcy, almost all are related to unexpected life events, like job loss, medical expenses, and natural disasters. So if you find yourself in a situation that has you considering Bankruptcy, please know that you are not alone and that it happens for people all the time.

WHAT IS
BANKRUPTCY

At its core, Bankruptcy is a legal process by which the court assists a Debtor in organizing their Debts and their Creditors in a manner that allows for the Debtor to repay as much as possible, while also giving the Debtor the right to start over with a zero balance. This is accomplished primarily in two ways, either Chapter 7 or Chapter 13, and they represent almost all Bankruptcy filings. But before we get into them in detail, just to be clear, the Debtor is the person or company who goes through the Bankruptcy. The Creditor is the people or companies that they owe money to. Debts are the amounts that the Debtor owes to the Creditor.

CHAPTER 7

Chapter 7 is the most commonly understood type of Bankruptcy and is the liquidation type bankruptcy. In it, the Debtor’s Debts are itemized and pooled into a few groups based on a number of factors. From there, some groups are discharged, while the remainder are given various levels of priority to determine which are paid first and which are paid last. Then the court assist the Debtor to determine how much they can reasonably pay and the debts are paid, by group and in order, until the Debtor has paid that amount. At that point any remaining unpaid Debts are discharged and the Debtor no longer owes those Debts. Because this process is a single payoff, it is typically quicker, cheaper, and more commonly used than any other type of Bankruptcy.

CHAPTER 13

Chapter 13 is defined by its payment plan structure. The Debtor enters into a 3-5 year repayment plan, which enables Debtors to discharge some Debts while others are pooled and paid off over time. This is a longer, more costly alternative, but it also enables the Debtor to negotiate and restructure Debts with Creditors which allows the Debtor to save assets, like cars, homes, and businesses. This enables the Debtor to minimize their assets lost, making it a useful tool for Debtors with incomes that may disqualify them or assets which would be impossible to protect in Chapter 7.

WILL I LOSE EVERYTHING?

Between exemptions and Chapter 13 repayment plans, you can protect any asset you need, provided that you can pay as required under the Bankruptcy. There are common exemptions that protect at least a portion of Debtor’s assets, which cover things like homes and vehicles. Depending on the Debtor’s income and ability to restructure assets, there can be opportunities to maximize your exemptions and repayment plans are available for protecting your non-exempt assets. Our attorneys at Hopler, Wilms & Hanna can assist you in positioning yourself to enter into a Bankruptcy that allows you to protect as much as possible.

WHEN SHOULD I CONSIDER

BANKRUPTCY AS AN OPTION?

Between exemptions and Chapter 13 repayment plans, you can protect any asset you need, provided that you can pay as required under the Bankruptcy. There are common exemptions that protect at least a portion of Debtor’s assets, which cover things like homes and vehicles. Depending on the Debtor’s income and ability to restructure assets, there can be opportunities to maximize your exemptions and repayment plans are available for protecting your non-exempt assets. Our attorneys at Hopler, Wilms & Hanna can assist you in positioning yourself to enter into a Bankruptcy that allows you to protect as much as possible.

We Are Grateful for The Recognition of Our Service to You

Christopher C. Wilms
Rated by Super Lawyers


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Christopher C. Wilms
Rated by Super Lawyers


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Christopher C. Wilms
Rated by Super Lawyers


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Christopher C. Wilms
Rated by Super Lawyers


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Christopher C Wilms Jr.Reviewsout of 6 reviews
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