NC Bankruptcy Lawyer in Charlotte North Carolina for Chapter 7 / Chapter 13
TYPES OF BANKRUPTCY

The Law Office of
Susanne M. Robicsek
   A founding member of Bankruptcy Law Network
   Real Lawyers, Real Solutions.

1701 Scott Avenue
Charlotte NC 28203
(704) 377-0776

There are two types of bankruptcy cases that most individuals or small businesses consider:


Chapter 7 Straight Bankruptcy

Chapter 13 Reorganization, Wage Earner (Individual Debt Consolidation)

CHAPTER 7 

Straight Bankruptcy, or Liquidation Bankruptcy

When you can't pay bills like credit cards, medical bills, or loans, Chapter 7 is the bankruptcy type which might allow you to be discharged of your legal obligation to pay many of your debts and let you get a fresh start.

Chapter 7 is often appropriate when debts for houses and cars are current, and there is no money left from your monthly paycheck to pay other bills like credit cards and signature loans. It allows you an opportunity to get your family back on a budget covered by your earnings.

If you find yourself saying "if only these credit cards and medical bills were not here, we'd be okay" then Chapter 7 might help you by eliminating those general unsecured debts, and allowing you to balance your budget.

Just because you file Chapter 7, that doesn't mean you loose everything.  You are allowed to keep a certain amount of property, which for many people is everything they own.  What you get to keep is called "exempt" property.  Exempt property is protected from creditors. 

Houses, cars, personal property, retirement accounts -- depending on the values and equity, many of these are protected for my clients in NC, and often can be kept through bankruptcy. 

Exemptions are different from state to state, and so where you file and how long you have lived there can affect what you get to keep.

The value of the items and the exemption laws that apply to your case will determine what you can keep.

Some people do give up property  - if it exceeds the amount protected by the law that covers the case.  If you have non-exempt (nonprotected property), it is sold, or liquidated, by the court representative (called the bankruptcy "Trustee"). 

But giving up something worth, say a fraction of what you owe in order to walk away from a huge debt you can not repay isn't always a bad deal, especially if you don't really need that item.

Whether your property is protected or not will be explained to you during your consultation so that you can make a decision on whether this is the type of bankruptcy that will best suit your family's needs.



CHAPTER 13

Chapter 7 is the only
straight bankruptcy case.  Individuals and companies can file this type.  There
are huge cases, and small cases; cases that don't have assets to pay creditors, and some who pay a lot.

Besides Chapter 13, there
are three other types
of reorganization cases. 
They do not apply to most 'regular' individuals. 

Chapter 9

Municipality/Cities
If you are not a city, just
keep reading.  If you are
a city, find a good lawyer. 
This is a very rare and
specific case and you want
an experienced lawyer
helping you.

Chapter 11

Corporate Reorganization, or Reorganization for people whose debts are
over Chapter 13 limits.


The 2012 limits for Chapter 13
are less than $360,475
unsecured debts and less than $1,081,400 secured debts.


Chapter 12
Farm Reorganization
This is a special type of reorganization plan for
family farmers or family
fisherman with regular
annual income.  If you
aren't making most of your 
living off  of growing crops, animals or fish, you probably don't need to know anymore
about Chapter 12.


Infividual Consumer Reorganization Bankruptcy, or the Repayment Plan

If you can pay a portion of your debts but not all of them, or you can't pay in the manner that your creditors want or as fast as they want, then Chapter 13 might be best for you. 

In 13, you have a monthly plan of repayment over 3-5 years, customized for you by your attorney using the protection and rules of the bankruptcy laws.

Many people think that they can't afford Chapter 13 payments because they didn't have enough money to pay the bills to begin with, or for credit counseling / debt management.

Chapter 13 helps you by stopping foreclosures and repossessions, as well as garnishments on debts (if your state allows them), student loan or tax garnishments.

It can stop repossessions and foreclosures.  Your plan payments are calculated to pay for missed house payments, pay off your car, and/or pay the I.R.S., among other things.

It may reduce the payments made to some of your creditors to the value of the item.  If you have a car that is worth a lot less than what you owe, you may get to keep your car but reduce what you pay to what it is worth.

If your property exceeds the amount protected from your creditors in Chapter 7, you might file 13 to keep your property from being sold to pay your creditors.   You are able to keep your property, and you will pay your creditors what the property is worth over time.  

If you can make payments, Chapter 13 can help you pay what you can afford and also protect as much property as possible.


Only people (individuals) can file Chapter 13 - corporations can not.  They have to file a more complicated Chapter 11. 

However small business owners may be able to get help in Chapter 13 since many small business owners have debts in their names, and so they may be helped in this kind of case, at a much lower cost than Chapter 11.


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Copyright Susanne Robicsek. All rights reserved.

The Law Office of Susanne M. Robicsek
1701 Scott Avenue Charlotte North Carolina 28203
phone:704 / 377-0776
fax: 704 / 377-0775

DISCLAIMER: This message is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion; Personal opinions may also be expressed. No attorney-client relationship is created by this message; Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.
 
The Law Office of Susanne M. Robicsek is
a Federally Designated Debt Relief Agency
under the Bankruptcy Code.
I file bankruptcy cases for people in financial need,
and have been doing so since 1989.

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Copyright Susanne Robicsek. All rights reserved.

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