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How Long Will Bankruptcy Affect My Credit Score?

 Posted on June 09, 2022 in Bankruptcy

charlotte bankruptcy lawyerOne reason that many people are hesitant to consider bankruptcy is because they do not want their credit score to be negatively affected. This score can play a significant role in your ability to obtain credit or loans in the future, so if you are planning to buy a home or car or make other large purchases, you may worry that bankruptcy will prevent you from doing so. However, if you are considering bankruptcy, it is likely that you are already encountering issues that may significantly lower your credit score, such as missed payments on credit card debts or other bills. Rather than trying to dig your way out of the hole you are in, bankruptcy can provide you with a fresh start, and while your credit score may take a hit, you can begin rebuilding your credit after wiping out some or all of your debts. 

Time Needed to Rebuild Credit After Bankruptcy

The amount of time bankruptcy will stay on your credit report will depend on the type of bankruptcy you file. Chapter 7 bankruptcy will remain on your record for 10 years, but Chapter 13 bankruptcy will only affect you for around seven years. While a bankruptcy filing may limit your opportunities to receive loans, as time passes after a bankruptcy, creditors will be less likely to see you as a risk.

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What Are the Bankruptcy Exemptions in North Carolina?

 Posted on May 10, 2022 in Bankruptcy

north carolina bankruptcy lawyerFor people who are struggling with debts, bankruptcy can be a good option. However, many people are hesitant to consider bankruptcy because they worry that they will lose some or all of the property they own. This is generally only true for a Chapter 7 bankruptcy, which may require some of a person’s assets to be liquidated so that as much of their debts as possible can be paid off before the debts are discharged. A Chapter 13 bankruptcy, on the other hand, will allow a person to pay off some of their debts through a repayment plan that will last several years, after which any remaining amounts they owe will be eliminated. Even if a debtor does choose to pursue a Chapter 7 case, there are a number of exemptions that will apply, and they may be able to keep most or all of their assets.

Exemptions to Liquidation in Chapter 7 Bankruptcy

If a person has lived in North Carolina for at least 730 days (two years) before filing for bankruptcy, they will be able to claim the exemptions defined in the state’s laws. These include:

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What Are the Types of Debts That Can Be Addressed Through Bankruptcy?

 Posted on April 12, 2022 in Bankruptcy

charlotte bankruptcy lawyerThere are many different types of debts that can cause a person or family to experience financial difficulties. In many cases, these difficulties occur because of circumstances that are out of a person’s control. For example, a person who suffers a serious injury or illness may have received multiple different forms of medical treatment, resulting in high medical bills that they are unable to pay. These problems can become even more serious if a person has been unable to work and earn enough income to cover their living expenses while also repaying the debts they owe. Fortunately, different forms of debt relief may be available, including filing for bankruptcy. Those who are considering bankruptcy will need to understand how different debts may be handled and how different types of bankruptcy may be used to provide financial relief.

Dischargeable and Non-Dischargeable Debts

Filing for bankruptcy can provide some immediate relief from debts through what is known as the “automatic stay.” After a bankruptcy petition is filed in court, this stay will go into effect, and it will prevent creditors from taking any actions to collect debts. Any foreclosure proceedings or repossessions will be halted during the bankruptcy case, and creditors will be prohibited from contacting the debtor in any way. The debtor will then be able to determine how to handle different types of debts throughout the bankruptcy process.

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Does Filing for Bankruptcy Stop Foreclosure?

 Posted on July 17, 2020 in Foreclosure

How the Pandemic Has Impacted Mortgages

The COVID-19 pandemic has wrought wide-reaching economic implications throughout the country, including substantial layoffs and furloughs in many business sectors. If you have recently lost employment or income as a result of the pandemic, you may have been worried about making your mortgage payments.

Thankfully, the CARES Act, passed on March 27, 2020, introduced emergency mortgage forbearance opportunities, giving many homeowners much-needed relief. Those with loans backed by Fannie Mae, Freddie Mac, the FHA, VA or the USDA, which together encompass almost 75% of the mortgage market, were eligible to apply for forbearance. If approved, you had the opportunity to request up to 180 days of forbearance, and an option to request up to another 180 days if you were still unable to pay at the end of the first period. Many private banks not covered by the CARES Act have also elected to offer forbearance and relief programs.

However, forbearance is not equivalent to forgiveness, and the delayed mortgage payments will eventually need to be repaid. Given the extent and further uncertainty of the pandemic's fallout, it remains possible you will still be experiencing financial difficulties when your mortgage forbearance period ends. If you are still unable to make your resumed mortgage payments, your lender may choose to initiate foreclosure proceedings, meaning you could lose your home.

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An Overview of the Means Test

 Posted on March 20, 2020 in Bankruptcy

Of the six types of federal bankruptcies, Chapter 7 and Chapter 13 are the ones used commonly for personal bankruptcies. There are some important distinctions between these two chapters. At the heart of the differences is the fact that Chapter 7 is a liquidation bankruptcy. Nonexempt assets of yours will likely be seized to pay creditors, and most of your unsecured debts (debts with no collateral) will be discharged within a matter of months. Chapter 13, on the other hand, lets you keep your house and other collateral but subjects you to a 3-5 year repayment plan in which you start to pay your creditors.

Based on these distinctions, you can see why Chapter 7 is more attractive for many debtors. At its best, bankruptcy gives you a clean financial slate from which you may work diligently to rebuild your credit and finances on a solid foundation. However, not everyone is eligible for a Chapter 7 bankruptcy. To be eligible, you must first pass what is called the means test.

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What Bankruptcy Cannot Accomplish

 Posted on February 27, 2020 in Bankruptcy

Many people benefit from a well-structured, rightly timed bankruptcy filing. While bankruptcy can give individuals some closure on many different debts and provide a fairly blank slate from which you may build a better financial foundation, there are limits to what bankruptcy can do for you. Knowing these limits is useful in giving people accurate expectations before they file for Chapter 7 or Chapter 13 bankruptcy.

What Types of Debts Are Not Dischargeable?

In the context of discussing what bankruptcy is not able to do, the most important consideration is the debts that will stay with you even after you have received a discharge in bankruptcy. Here are some common examples of these debts:

  • Student loans. Unfortunately, student loan debt is not eligible for discharge under any bankruptcy except in very rare circumstances - what is often described as an 'undue hardship.'

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Tax Refunds and Bankruptcy

 Posted on January 01, 2020 in Bankruptcy

Will Filing For Bankruptcy Effect My Tax Refund?

Those who file for Chapter 7 or 13 may be able to keep their tax refund, however, whether or not you can keep it depends on the prebankruptcy precautions you take to protect your refund. If you have already filed for bankruptcy, will the trustee assigned to your bankruptcy case take your refund? Is your tax refund safe at any point if you will file for bankruptcy before the year is over?

This blog will answer those and other questions you have about taxes and personal bankruptcies.

If I Want to Keep my Tax Refund, When Should I File for Bankruptcy?

It may be a good idea to file bankruptcy after you have received your tax refund. In fact, you may want to use a portion of your tax refund to pay for the costs to file bankruptcy. That is not uncommon. You also may want to spend your tax refund on other necessary expenses, such as food, shelter, or transportation. If you decide to go this route, don't forget to keep receipts showing how the money was used.

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Understanding Chapter 13 Bankruptcy

 Posted on December 20, 2019 in Bankruptcy

If your personal financial situation has you considering filing for bankruptcy, you should know about your two options: Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy, sometimes referred to as 'straight' bankruptcy, is an effective way to wipe most of your debts clean in a matter of months, but there are several drawbacks to this type of bankruptcy. The largest caveat with Chapter 7 bankruptcy is that many people do not legally qualify for Chapter 7. Therefore, Chapter 13 is the only option for many personal bankruptcy filers. However, sometimes Chapter 13 is the better choice for many even if they qualify for Chapter 7.

What's Unique About Chapter 13?

The main differentiator between Chapter 13 and Chapter 7 is that under Chapter 13 bankruptcy, you will enter into a payment plan with your creditors. The plan, which is overseen by a bankruptcy trustee, almost always lasts between three and five years.The good news for you is that you might not even be liable for the full debt amount. An experienced bankruptcy attorney is often able to negotiate down the amount you owe. For these reasons, Chapter 13 bankruptcy is sometimes called 'debt reorganization.'

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A Brief Overview of the Bankruptcy Trustee's Role

 Posted on November 20, 2019 in Bankruptcy

When you decide to file bankruptcy, you will have a trustee assigned to your case. The trustee takes on a number of important tasks and administers your case. Their goal is to assess your circumstances, ensure that you are not hiding property, manage the property in the bankruptcy case, and manage payments.

Who Is the Trustee?

Trustees are appointed by the courts. Trustees are typically accountants or lawyers.

Trustees in Chapter 7 Bankruptcies

In a Chapter 7 bankruptcy, the ultimate goal is a discharge of all qualifying debts. The trustee is expected to be impartial throughout the process. They receive a small fee for their services, as well as a percentage of any property sold. This serves as extra motivation to find property that people who file bankruptcy may try to hide.

After you file your bankruptcy petition, your trustee will review and verify everything. They also have the chance to ask you questions at the meeting of creditors. In many cases, the trustee simply asks basic questions regarding the accuracy of your bankruptcy petition and the information included in it. If anything doesn't line up, they may dig deeper to understand any discrepancies. If they believe you are concealing assets or hiding property, they may even object to your discharge.

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A Step-by-Step Guide to the Bankruptcy Filing Process

 Posted on October 20, 2019 in Bankruptcy

Maybe you've decided that bankruptcy is the right choice for your family. What's your next step? This step-by-step guide outlines what to expect throughout the bankruptcy process and what your responsibilities are along the way.

Step 1. Discuss Bankruptcy Options with An Attorney

Though you can represent yourself, bankruptcy cases can be incredibly complicated. For that reason, I always recommend that you hire an attorney. Depending on your income level and the amount of debt you have and your assets, you can choose Chapter 7 or 13 bankruptcy. It's important to discuss these options with a lawyer, since Chapter 7 and 13 have their own specific requirements, and each provides different benefits. While a Chapter 7 bankruptcy allows for a full discharge of debt without any repayment, a Chapter 13 bankruptcy permits you to keep some of your assets while making monthly payments.

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