A bankruptcy blog containing useful information for anyone considering a Charlotte bankruptcy attorney.
Along with Chapter 7, individuals may consider filing a Chapter 13 bankruptcy. This short article is designed to create some understanding around the differences between a Chapter 7 and a Chapter 13, and why you might choose Chapter 13.
It Might Be The Only Choice (But it’s still a good one)
Some people have too much income and not enough debt to file a Chapter 7. If you don’t pass The Means Test and your income and debt considerations show you have too much disposable income, the bankruptcy code won’t allow Chapter 7 as an option, and you must consider filing a Chapter 13 bankruptcy instead.
Additionally, if you received a discharge in Chapter 7 in the last eight years, or a discharge in Chapter 13 in the last six years, you cannot successfully file again for Chapter 7. The rules for filing a Chapter 13 petition are more lenient: you need only wait four years after filing a Chapter 7, or two years after filing a previous Chapter 13 petition.
You May Want The Protection A Chapter 13 Provides
If you decide with your bankruptcy lawyer that you want to keep your home and file bankruptcy, a Chapter 13 is often the route that allows for this. While you can keep your home when filing Chapter 7, you can only do so if you are current on all home mortage payments. In a Chapter 13, even if you are behind in mortgage payments, you can choose to keep the home. The same is true for considerations regarding taxes and child support obligations.
You May Want To Keep A Business Or Asset
Often, a Chapter 13 filing will allow you to continue to own and operate business assets (Buildings, equipment, etc) in situations where a Chapter 7 may not. The bankruptcy court looks at all of your assets when you are filing, and that often includes assets used for business, so Chapter 13 gives you an opportunity to maintain possession and ownership of those assets while discharging other unrelated debt.
You may also have a personal asset which is non-exempt under a Chapter 7 filing. An example would be a vehicle that is paid for and worth more than the $3,500 exemption plus any “Wild Card” exemptions. Here is a link to a post about exemptions. The filing of a Chapter 13, if it is approved by the court, allows you to keep those non-exempt assets provided your creditors make out as well as they would have if you had filed a Chapter 7. These adjustments are made in your monthly payment in your Chapter 13 plan.
While a Chapter 7 filing is an arguably easier and undeniably faster way to discharge debt, a Chapter 13 filing often helps you accomplish your longer-term goals and objectives. Your attorney can help you sort through the options quickly and easily.
Email me at email@example.com or call 704.749.7747 today to discuss your situation. I answer my own telephone and I would be happy to hear from you.
Whether you qualify for bankruptcy certainly involves an examination of your income. Your income alone though, is not typically what determines whether you have the ability to file a Chapter 7 or a Chapter 13 bankruptcy. Instead of looking at just income, your attorney—and later the bankruptcy court—are looking for the balance that exists between your income and your monthly expenses.
There are minimum thresholds for income, which may automatically qualify you for bankruptcy. This is referred to as The Means Test in bankruptcy. In other words, if you make less than a certain amount per year, it doesn’t matter what your monthly debts are, you qualify and have the option to file. If you make more than that threshold income amount, this is where your Charlotte bankruptcy lawyer helps you determine if you’re still eligible.
I talk to people every day who don’t pass The Means Test. But the debt they are paying on each month makes them eligible to file! By the way, it’s that same debt that will ultimately be discharged in bankruptcy and give you the ability to once again live a healthy financial life.
Below are the income thresholds in North Carolina which are used for The Means Test. Find the number of people in the household that applies to you, and look at the income figures on the right. If you make less than that amount, you automatically qualify under The Means Test. If you make more than that amount, you and your attorney will compare your income to your expenses to see if you can still qualify.
The number of household members includes children, parents, or anyone else who lives in the home.
|Household||Annual Income||Monthly Income|
|Additional Persons||$7,500 each||$625 each|
I Don’t Pass The Means Test. How Much Monthly Debt Do I Need?
When the amount of money going out each month exceeds the amount coming in, you are usually able to qualify for a Chapter 7. Chapter 7 is an expedited bankruptcy process that ends calls from creditors within one week after filing the bankruptcy petition with your attorney. If you do not qualify for a Chapter 7, a Chapter 13 is an option. This option involves making a (MUCH smaller) monthly payment to the bankruptcy court, and that payment is divided among your creditors. Once you make all of your payments, the debts are discharged.
Any competent bankruptcy attorney in Charlotte, NC can help you over the phone or in person, in quickly figuring out whether you qualify for a bankruptcy. Then, with your attorney’s help, you can decide if it’s the right option for you.
Email me at firstname.lastname@example.org or call me today at 704.749.7747 to discuss your options. One call is all it takes to begin the path to financial freedom.
You may be wondering about the timeline of a Bankruptcy and what to expect during the process. This Chapter 7 bankruptcy overview will help. Consumer Bankruptcy law is designed to relieve individuals of debt and allow them to obtain a fresh start. Chapter 7 is the most common form of Bankruptcy and what most clients file.
The entire process of receiving a discharge of debt in a Chapter 7 Bankruptcy takes approximately three months from beginning to end. This timeline begins when the Bankruptcy petition is filed. Creditors are given notice of the filing, and at that time, all collection calls will stop. The Bankruptcy court then assigns a hearing date and a case Trustee. That hearing, known as a 341 meeting, is usually set for one month after the filing date. At the hearing, the Trustee will be three to review petition and ask questions. This is a very brief meeting.
After the hearing, it will take two months for case to conclude and you are issued a discharge of debts. There is typically nothing for you to do during this time, but if anything comes up you can call your attorney to discuss. Let’s take a look at a few items specifically:
You have a choice as to whether to file by yourself or with your spouse. Your attorney will cover the differences between single and joint filing. You can file if you are separated as well– the laws allow for and are designed to show the true financial picture for the individual or individuals filing, and determine if you are eligible for relief.
Property and Debt
As part of determining if you are eligible, first the court wants to understand what you own for property (real estate, cars, financial accounts, other personal property). Your attorney will complete a Chapter 7 bankruptcy overview with you including examining your financial picture. After a clear picture of your property is presented, the court then wants to know who you owe and what you owe them. This information includes credit card companies, mortgage debt, car loans, hospital bills and other debt.
The Whole Picture
When the entire financial picture is clear, the court will look for the attorney to show that your monthly income is not enough to cover your monthly expenses. In other words, despite your best efforts, you have no ability to repay your debt and you are entitled to relief. This is not a ‘judgmental’ process. You will not be ridiculed for the choices you’ve made in past purchases, and are not asked whether you spent or managed money in a responsible manner.
As part of this overall determination, there are exemption laws which draw a circle of protection around your assets. I mention this to be sure you understand that while it is possible to lose property during a bankruptcy it is not likely. Cars and homes, for example, are assets most individuals do not have to part with as part of a Bankruptcy filing.
Together, we will look at your previous six months of income from all sources, not including Social Security. If your family’s income falls below the median income for your state, you pass the test and you are eligible for relief. At that time we file your petition, present the case to the court, and request relief.
Email me at email@example.com or call me today to discuss your options quickly and confidentially. 704.749.7747.
Choosing the right lawyer to assist you in filing a bankruptcy is important. Together with your Charlotte bankruptcy lawyer, you will examine your options and choose a path of recovery that will dramatically improve your life. That may involve filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy. In the alternative, it may mean your lawyer reaching out to negotiate with a mortgage company or other creditors on your behalf. A lawyer who places your best interests ahead of their own will gather information from you, ensure you understand your options, and help you make a choice.
I have been practicing law for thirteen years and I’ve found that the most important thing I can do for my clients is listen to them. It sounds simple enough, but every client has a unique history and individual goals and objectives. My job is to talk to them until I understand their situation and we create clarity around their objectives. Then I strategize with them about how to get those objectives met. Typically that involves filing a personal bankruptcy, but sometimes there are other options.
Forming a Working Relationship
Together with your attorney, you will have an ongoing working relationship. It’s important that you and all clients are regularly kept abreast of the progress being made for them, so my clients and I never get off the phone without deciding when we will talk next. We also talk about what is going to happen between this phone call and the next. It helps set expectations and provides us the focus we need to move forward quickly.
You should be getting updates from your bankruptcy lawyer on a regular basis and you deserve to speak to the lawyer handling your case. I answer my own phone. I enjoy talking to my clients. They’re good people. It’s also the only way to fully understand what is important to them and help them achieve it.
Regular communication is also a way for me to make sure that my clients haven’t gotten stuck while trying to gather information. Third parties like the IRS and creditors can be slow to respond, and it’s not uncommon for me to assist clients in gathering information. It’s part of the job. The goal is to get to the finish line together, as quickly as possible.
Choose your Charlotte bankruptcy attorney carefully. You will get to know one another. You will overcome hurdles together. In the end, together you will celebrate the accomplishment you’ve achieved, and the bright future that lies ahead for you.
Call today. I’ll answer my phone personally, and we can talk about your options. 704.749.7747.
Do I have to go to the courthouse?
Yes. You will typically have to go to the courthouse one time, for what is called a 341 meeting. This meeting takes place about 40 days after you file your Chapter 7 or Chapter 13 bankruptcy. If you file Bankruptcy in Charlotte, NC, your meeting will be at the Federal Courthouse which is located uptown. It’s remarkably easy to get to and we will provide you with easy directions to it.
What is the meeting for?
The 341 meeting is a meeting of creditors. Despite that, your creditors do not often attend. Typically the individuals at the meeting will be you, your Charlotte bankruptcy attorney, and the bankruptcy trustee who is overseeing your case.
Will I be put on the stand and questioned?
You will answer some questions under oath, yes. The meeting takes place in a small conference room. You don’t have to take the stand. Either way, being under oath is nothing to fear. Your obligation is simple: be honest with the trustee in the same way you were honest with me and my firm leading up to the filing of your bankruptcy petition341 . And, we will prepare together for the types of questions you will be asked that day. Your bankruptcy attorney will be there to support you as well.
What types of questions will I be asked?
The trustee will ask you to confirm your address, your marital status and whether you’ve filed before. They will ask if you listed all your debts and if anyone owes you money. They will ask you about potential inheritance, and whether you stand to have a reward from a lawsuit if you have filed one. They are generally attempting to make sure the petition that was filed is an accurate portrayal of your financial situation. It’s my job to help ensure the answer is yes. That makes the 341 meeting easier for you, and shorter as well.
The trustee may also ask the bankruptcy attorney some questions. That is not uncommon. All parties are being asked to confirm that they are familiar with the contents of the petition and to tell the trustee if anything has changed since filing.
How long will it last?
The meeting will generally last about 10 minutes. Sometimes shorter, sometimes a little longer. Remember, weeks prior to this meeting when you filed your bankruptcy petition, your creditors stopped calling. After attending the 341—a very important step—you will receive your discharge in about 60 days. That means that in addition to the creditors no longer calling you, your obligation to repay the debt included in the bankruptcy is completely extinguished. Your fresh financial start has officially begun.
The process of going through a Bankruptcy can feel daunting. I can assure you that you are currently handling much more stress and anxiety than that involved with preparing for an attending a 341 meeting. You’re ready for this. Email me at firstname.lastname@example.org or call 704.749.7747 to talk about your options today.
Much like any substantial undertaking, it may never feel like the right time to file a bankruptcy in Charlotte, NCI know that you already value the health and welfare of your family over avoiding any negatives you’ve imagined will flow from filing a bankruptcy. In my opinion, when you are ready to act on that value with the help of an attorney, that is the day you take the first step and make a phone call to move forward with achieving the goal of financial recovery.
That is my goal. But what about living expenses leading up to filing? Can I continue to use my credit cards until the day I file?
Your long-term financial health will be restored by the filing of bankruptcy. You are right to insist on a plan for managing your short-term financial health. My clients and I always discuss how they are making ends meet today. We then talk about what changes they should or can make leading up to the bankruptcy filing, and the impact of those changes.
In addition to helping you successfully achieve a discharge of your debts, I consider it my job to help you figure out how to survive as we approach the bankruptcy filing. You can continue using your credit cards until the day you file. Ideally, clients wait to file until they have not used the cards for several months. We are not living in an ideal world. I can’t tell you the last time I reviewed a case like that.
So I can use the cards if I have to, but I need to be careful as to how I use them?
Yes. The Bankruptcy Code states that consumer debt totaling more than $500 for luxury goods and services owed to any one creditor incurred within 90 days of filing, or cash advances totaling $750 or more owed to any one creditor made within 70 days of the filing are non-dischargeable. This doesn’t mean you can’t file. It does mean those particular charges would not be included in the bankruptcy. Additionally, charges owed to a creditor that were incurred by false pretenses or fraud are not dischargeable.
What does this mean, practically speaking?
If you have charged more than $500 to one particular card within 90 days of filing, the “presumption of abuse” will arise and creditors will most likely object. The same $500 spread out over several cards may not trigger an objection. Regardless, if you have spent over $500 within 90 days on a card for non-luxury items (reasonable living expenses: food, electric bills, etc), I will argue against the presumption of abuse and most likely be able to achieve a discharge of those charges in a Chapter 7 or a Chapter 13, even though they occurred within the last 90 days.
I want to recover. What do I do next?
It’s easy. You call my office. I will personally answer the phone, and we will have a brief conversation about your situation. My hope is that after that conversation you feel more hopeful, more empowered, and more educated about your options. If filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy is in your best interest, I will be here to help you with that. The phone call is free. More importantly, it can change your life.
Please take the next step toward your true financial health. Email me at email@example.com or call me at 704.749.7747. My job is to help, if you’ll give me the chance to do it.
There are circumstances where it is permissible to include tax debts in a bankruptcy filing. This often makes a significant difference in the amount of relief to the client and the timing of the filing should be closely monitored.
Generally, there are three conditions that must be met in order to discharge tax liabilities in a bankruptcy.
First: The liability in question must be at least three years old prior to the filing. To determine this we look to the year the debt was due PLUS any applicable extensions and their deadlines. From the most recent extension deadline you count three years. If you file after that date, you can include the debt in the filing provided the next two conditions are met as well.
Second: The tax return for the tax year in question must have been filed at least two years prior to the bankruptcy filing. In other words, you cannot file a tax return for 1996 today, and then file bankruptcy tomorrow—the filing itself must be at least 2 years old, in addition to the requirements above. If however, you waited to file a 1996 tax return until 2010, you would be able to include the debt in a bankruptcy filing in 2012 or later provided the other 2 conditions are met.
Third: The taxes related to the debt in question must have been assessed at least 240 days prior to the filing. For example, if the filing is old and the taxes are old, yet you were just recently audited and as a result of the audit a tax was assessed, you would have to wait the 240 days after the assessment to file.
Taxes are confusing enough when we are not in debt to the IRS. The addition of tax debt to a bankruptcy filing can often make a meaningful difference for the client. Please email firstname.lastname@example.org or call 704.749.7747 today for a free phone consultation to find out your options.
Creditors are relentless in their pursuit of money. Remember, they are doing whatever the law will allow them, and they will continue to do so until the debt is paid. With late fees, high interest and penalties. You can stop collections calls today.
Suffering doesn’t make sense. With the banks’ unwillingness to be flexible or give you some additional time, what does make sense is for YOU to bring stability back into your life by taking whatever steps the law allows. Knowing your rights can change your life quickly and dramatically. A bankruptcy attorney can help.
Did you know: Filing a bankruptcy with the court puts an automatic stay on collection calls and other collections activities including foreclosure. This means the day you file your Chapter 7 or Chapter 13 bankruptcy, you get instant relief—no more threatening phone calls.
Did you know: After the bankruptcy is filed, creditors who contact you in an attempt to collect on a debt are breaking the law. If you do get phone calls after filing, you should immediately let your bankruptcy lawyer know: you may now have a case against the creditor for violating the rules associated with the automatic stay!
Did you know: You don’t have to notify the creditors yourself. Your attorney can notify your creditors on your behalf, and in the alternative, the court provides notice to creditors upon the filing of the bankruptcy.
After a brief phone consultation with your Charlotte bankruptcy attorney you will be well on your way to relief. Call 704.749.7747 today to get free information quickly. The future can be different and one call can make that difference.
When a personal finance matter turns into a legal matter, it’s time to act quickly. I got a call yesterday from an individual who received a Motion To Claim Exempt Property. He was confused by the language used in the motion, and of course wanted guidance on what to do next. In one quick phone call, we discussed the motion, I asked a few questions about his finances and we decided together how to respond.
If you receive this document, it is because a creditor has obtained a judgment against you. It should be regarded as a clear sign that the creditor is attempting to collect on the judgment. While that may cause anxiety, the Motion To Claim Exempt Property is actually reminding you that you have rights, and is giving you a chance to exercise those rights.
Once you receive this notice, you have twenty days to respond by filing a written response with the court. If you fail to file the response, you waive your right to the exemptions (protections) that the state offers. These protections are similar to the protections you have by law when filing a bankruptcy, so a bankruptcy attorney is the right person to speak to when you receive the motion.
With the help of an attorney, you can either fill out the form and submit it to the court, or you can file a bankruptcy petition which puts a stay on the collection process by notifying ALL creditors that you have chosen to file a Chapter 7 or Chapter 13 bankruptcy.
Equity in the following items is protected or exempted by the state:
Your residence: $35,000 (single) $70,000 (married)
Your car: $3,500
Miscellaneous items (“Wild card”): $5,000
Other household items: $5,000 (single) $10,000 (married)
Other—Some items like 401k through an employer or IRA accounts of your own may be entirely protected. Your lawyer can assist in making that determination for you
Let me help you relieve some of this stress and move forward confidently. Whether you choose to file the response yourself, file it with an attorney, or file a bankruptcy with a lawyer in Charlotte, The important thing to do is ACT NOW. Call me at 704.749.7747 to discuss the options and decide today what’s best for you.
The North Carolina Homestead Exemption
Most people who call me about filing a bankruptcy in Charlotte want to know what will happen to their home if they file. Fortunately, the answer is usually a good one. North Carolina has something called a Homestead Exemption which protects some or all of the equity in your home.
For instance, if you are a homeowner filing separately, you can protect up to $35,000 in equity in your home. If you are married and filing for bankruptcy jointly, you can typically protect twice that, or $70,000. By way of example, if you own a home valued at $300,000, with a mortgage of $250,000 you can still file bankruptcy while keeping the home. This is great news to clients who want to stay in their home but eliminate medical bills, credit card debt and other types of debt which are discharged when you file a Chapter 7 bankruptcy.
In a Chapter 13 bankruptcy, you can typically keep your home even if your equity exceeds the $35,000/$70,000 exemption limits. Depending upon the equity that exists beyond the NC Homestead Exemption, your attorney can help you determine your monthly payment under a Chapter 13 bankruptcy, which would eliminate unsecured debt (credit cards, etc) while allowing you to keep the home.
If the options begin to sound complicated, that’s OK. Your Charlotte bankruptcy lawyer can easily walk you through them and help you decide the best option for you and your family. Call me today for a free phone consultation at 704.749.7747.