This video helps you understand how your creditors are provided notice about your bankruptcy filing. The Layton Law Firm PLLC routinely represents bankruptcy clients in Chapter 7 and Chapter 13.
Charlotte Bankruptcy Blog
Posts containing useful information for anyone considering a North Carolina bankruptcy lawyer.
This video helps you understand how a bonus works in Chapter 13. The Layton Law Firm PLLC routinely represents bankruptcy clients who receive annual bonuses or commissions. We have been able to successfully assist clients in keeping those bonuses and commissions in Chapter 13.
How Much Debt Do You Need To File Bankruptcy?
There is no set amount of debt needed to file bankruptcy. In deciding whether to file bankruptcy, we examine the amount of debt you have, the type of debt you have, and whether you qualify for Chapter 7 or Chapter 13 from an income perspective. This article seeks to address concerns surrounding “How much debt do you need to file bankruptcy?”.
Unsecured debt is a debt that is not tied to any property. Common examples include credit card debt and credit “lines”. Unsecured debt is discharged in bankruptcy. When deciding if you have enough debt to file bankruptcy, you might consider the cost of filing bankruptcy as compared to what it would cost you to settle the debts with each creditor. Our office routinely assists clients with debt settlement when it makes more sense to settle the debt instead of file bankruptcy. Generally speaking, if you have more than $15,000.00 of unsecured debt and you do not have the ability to settle that debt or keep current on payments, you should consider a bankruptcy filing.
Secured debt is a debt that is “secured” by a property—a car or home, typically. In a bankruptcy filing, you have the choice to either keep the secured debt (See: Keep Your Car In Bankruptcy) or discharge the debt. Keep in mind, the property travels with the debt. If you choose to keep the property, you keep the debt. If you surrender the property, the debt goes with it.
Upside Down Vehicles
Many clients are faced with a vehicle that is upside down. In other words, prior to bankruptcy, the value of the car is worth less than the loan balance. Trading the car in for a new car simply means carrying that negative equity into the new vehicle purchase. Bankruptcy offers a different solution. You can purchase a new car just prior to filing bankruptcy. Then, when you file the bankruptcy, you surrender the old car (and the old debt), and you are left with only the new car and the new car debt.
Creative Bankruptcy Solutions
You will find that much like the vehicle solution above; bankruptcy offers an opportunity to deal with your debt creatively. Chapter 13, which we discuss in greater detail in prior blog posts, also offers vehicle and home solutions ranging from stopping foreclosure to lowering your vehicle interest rate. Often, these solutions more than make up for the cost of filing bankruptcy.
Speak With A Bankruptcy Lawyer Today
If you have questions about “How much debt do you need to file bankruptcy?”, we are here to help. Call us at 704.749.7747 or click HERE to request a free consultation. You deserve to understand your options and we would love to speak with you.
New Year’s Resolution – File Bankruptcy Now
If you are thinking that the only thing that could make this year worse than last year is to stay buried in debt, it is time to file bankruptcy. You deserve the fresh start that filing bankruptcy provides, and our office can help.
Both Chapter 7 and Chapter 13 offer amazing and powerful relief from creditors, in exchange for providing detailed information about your income and assets. Whether you are considering a Chapter 7 liquidation or a Chapter 13 reorganization of debt, our office can assist.
A Fast And Easy Bankruptcy Filing
When you file with our firm, we make a point of streamlining the process leading up to the bankruptcy filing. This means all of your documents can be submitted through our online portal, and documents can be signed electronically as well.
Generally, we will need tax returns, vehicle registrations, bank statements, and a few other documents in order to prepare your bankruptcy filing. If you are facing a foreclosure or vehicle repossession, we can file an emergency bankruptcy prior to obtaining that documentation. This halts the process and gives you immediate relief from creditors.
A Lawyer And Staff That Cares
Our firm knows the anxiety associated with financial stress, especially as jobless claims increase across the state. Our goal is to provide you relief from that stress. We know the bankruptcy filing will give you financial relief; however, you will find our compassionate and diligent approach refreshing. We know lawyers have a reputation for being ‘stuffy’. You will not find that at The Layton Law Firm. Instead, you will experience quality conversations, routine updates on your case, and you will come away with the confidence you need to start fresh.
Speak With A Charlotte Bankruptcy Lawyer Today
If you are ready to move forward or just have questions, we are here. You can reach us at 704.749.7747 or click HERE to request a consultation by phone. All consultations are free and answering questions is part of the job. We know you have choices. We hope you choose Layton Law.
Does My Spouse Have To File Bankruptcy With Me?
No, your spouse does not have to file bankruptcy with you. Whether you file individually or together will be a function of your income, assets, and debts. Our office will assist you with the decision-making process and weighing the pros and cons of a joint bankruptcy filing or an individual bankruptcy filing.
While it may make sense for both spouses to file bankruptcy, a qualified Charlotte bankruptcy lawyer will walk you through the options that suit your particular situation best. Typically, married couples hold debt in many different ways, so it makes sense to analyze the specifics of your situation before making a choice. Filing jointly may provide more debt relief, but there are other concerns to consider.
Let’s Talk Debts
If you and your spouse have separate debts, you may consider filing individually. When you file without your spouse, your debt is discharged, and your spouse’s debt survives the bankruptcy. If you have joint debt and one spouse files, the debt as to the filing spouse is discharged. However, it is important to note the non-filing spouse will still owe the entire balance on the debt. For this reason, many married couples choose to file a joint bankruptcy.
My Spouse’s Credit
One reason to file individually is to preserve the credit of one spouse. In cases where spouses do not hold debt jointly, this is typically a clear option. The filing spouse receives a discharge for the debt in his name, and the non-filing spouse retains her good credit, along with her debts.
North Carolina is not a Community Property state, so even where a married couple holds joint debt, if the non-filing spouse keeps payments current on her debt, her credit score will not be affected.
Does Income Matter?
Income plays a role in whether you have the option to file a joint Chapter 7, and income plays a role in the calculation of your monthly payment in a Chapter 13 bankruptcy filing. When both spouses file, all household income is included in the monthly budget. This affects your Means Test in Chapter 7, and your disposable income in Chapter 13. It is worth noting that all household expenses are also included in those calculations. The goal is to give the court an accurate picture of the household’s financial situation.
When considering whether one spouse should or should not file, income may play a strategic role. Even if one spouse is not filing, both spousal incomes must be included in the income column of the bankruptcy filing. However, any income the non-filing spouse spends on herself (i.e., does not contribute to the ‘household expenses’) can be deducted from this total. For example, if one spouse makes $7,000.00 per month, but gives $1,000.00 a month to help her parents, and contributes another $700.00 per month to a 401k plan, those items are subtracted out from the income totals. Once our office runs hypothetical calculations under both scenarios, the difference often helps dictate the filing strategy.
Ownership Of Assets
The rules of bankruptcy are unique. They do not always make sense, but they are generally predictable. Our firm is familiar with the court’s treatment of asset ownership in both Chapter 7 and Chapter 13. We will ask you who currently owns each family asset and whether those assets have been transferred recently. Quite often, we drive a vehicle believing it to be “our” vehicle, even though it may be titled in our spouse’s name. The same may be true of a home owned by a married couple. Determining who is on the deed to the property is of utmost importance in applying the bankruptcy asset rules to your case.
Many assets in a household are not titled. Generally, ownership of household assets is assumed to be owned 50/50 between spouses. However, if a large item was given as a gift, we may be able to categorize that item as yours or your spouse’s, depending upon the specifics.
In a Chapter 13 filing, the automatic stay is effective for the co-debtor on consumer debt. This means that if one spouse files and another does not, and they hold joint debt, even if they are not paying on that joint debt, creditors cannot pursue collections against either spouse. So the calls stop, and you get to preserve your credit at the same time. Not only that, but for joint debt, creditors cannot repossess property or foreclose on your spouse just because she didn’t file.
This automatic stay remains in effect until the bankruptcy is over. However, once the bankruptcy concludes, the creditor can resume attempts to collect against the non-filing spouse for those joint debts. At that time, the hope is that you’re able to make payments on that debt because of the relief the bankruptcy provides.
A Backup Plan
Another reason to have one spouse file is to provide a backup plan if you get into a spot where you cannot make your Chapter 13 payments. If the first filing is dismissed for non-payment, the non-filing spouse could consider filing a new Chapter 13 to get relief from creditors.
Do not Worry, Call A Lawyer
The good news is your bankruptcy lawyer addresses all of these potential hurdles for you, and in doing so provides for a smooth bankruptcy filing. Call us to speak with a lawyer today. We can be reached at 704.749.7747 or you can simply click HERE to request a call. For further reading, this ABI article on non-filing spouses may be helpful.
Filing A Restaurant Bankruptcy
As Covid-19 rages on and restrictions for public gatherings ramp up, restaurants in Charlotte and the surrounding area—as well as the country—continue to feel the pain. Many restaurant owners indicate they are at a breaking point financially. During a time when sales are supposed to be highest and restaurants can make up for slower months, the exact opposite is happening.
We speak with small business owners every day regarding their financial predicament. This of course includes restaurant owners. What many small business owners are surprised to find out is that filing a restaurant bankruptcy can be the secret ingredient to future success.
Your Business Can Continue
The options in bankruptcy for restaurant owners have increased with the Small Business Reorganization Act. Together with Chapters 7, 11, and 13, most restaurant owners can find a bankruptcy solution that fits their particular needs.
The primary decision you will need to make is whether the business is going to continue to operate. If it is not, your bankruptcy lawyer will assist with the dissolution of the business in conjunction with the bankruptcy filing. If the business is going to continue, it can do so under either a Chapter 7, 13, or Small Business Reorganization. Chapter 11, an expensive bankruptcy option, is not usually required for a restaurant that is filing bankruptcy.
A recent article in the Philadelphia Inquirer makes specific mention of the concerned business owners have regarding continuing operations. Particularly, the article addresses the concern regarding dealing with suppliers. Typically, suppliers will continue to work with you; however, they may require you to pay COD until you prove yourself with them over time.
You Can Protect Your Assets
The bankruptcy code allows for assets to be exempted from creditors. The ability to preserve assets is different depending upon the Chapter you are filing, and your bankruptcy lawyer will work with you to determine your asset exemption needs when strategizing which bankruptcy route to take.
There are some assets that are exempt from creditors in bankruptcy in an ‘unlimited’ amount—401k and retirement savings, for example—so it is important to speak with a bankruptcy lawyer before you start depleting those assets to keep your business running outside of bankruptcy.
Speak With A Charlotte Bankruptcy Lawyer Today
If you own a small business or restaurant, we are here to help. Speaking with someone about your options not only helps ease the anxiety and fear you are feeling, but also provides you with clear direction regarding your options. We know you have put your life into the business; bankruptcy can help you save it.
To speak with an attorney, call 704.749.7747 or click HERE to request a phone consultation. All consultations are free and can be conducted over the telephone.
Mortgage Foreclosure Moratorium and Mortgage Forbearance In NC
The mortgage foreclosure moratorium has been extended to December 31st, 2020. This means even if you are delinquent on your mortgage, your lender can not move forward with foreclosure until the moratorium passes. Additionally, forbearance options exist for those having trouble making their payments due to COVID-19.
Mortgage Forbearance Options
As of late October 2020, North Carolina homeowners need to apply for forbearance relief by December 31st, 2020. Mortgage forbearance is available through the Federal CARES Act for homeowners who have financial hardship as a result of COVID-19.
Length Of Mortgage Forbearance Options
Per the CARES Act, the mortgage company must provide forbearance relief for up to 180 days upon request. Borrowers are then allowed to request an extension of the forbearance for up to another 180 days.
Contact Your Mortgage Provider
The smartest thing you can do regarding forbearance and the upcoming expiration of the moratorium is to contact your mortgage service provider. It is by speaking with them that you will discover your options, and prepare for how the deferred payments will be addressed once you come out of forbearance.
Lenders are not permitted to demand the delayed payments be paid in a lump sum. To be clear, the debt does not go away. You will plan with your lender for repayment with an increased monthly mortgage payment spread out over a length of time agreed upon by your mortgage provider.
Bankruptcy After Forbearance
If you come out of forbearance and realize you will be unable to make your increased mortgage payment, you may fall behind on the new payments. If the lender moves forward with a foreclosure proceeding, you can use bankruptcy to save your home by filing a Chapter 13 bankruptcy which allows you to catch up on your missed payments. You may also decide that Chapter 7 is a better option for you depending upon the equity in the home and your goals regarding home ownership.
Speak With A Charlotte Bankruptcy Lawyer Today
Our firm helps homeowners save their homes from foreclosure every day. Call us for guidance and we will help you understand your options before it is too late. You can reach us at 704.749.7747 or click HERE to request a phone consultation.
If you have an emergency situation, our firm can file a bankruptcy for you within 24 hours. However, we do not recommend filing bankruptcy that quickly unless it is absolutely necessary. A few examples would be to stop a foreclosure sale or to prevent a vehicle repossession.
If you are not in an emergency filing situation, a bankruptcy typically can be filed in about 30-45 days, depending upon how quickly you would like to move forward. We cater to your needs, so if you would like to file more quickly, we can certainly assist with that.
The answer depends upon a few factors. Primarily, they are:
- How quickly you can deliver documentation to your bankruptcy attorney
- Whether you are choosing a Chapter 7 or a Chapter 13
- Reasons which may exist to delay your filing
Phase I – Gathering Information
Working with our firm is easy. We simplify the process as much as possible and do our best to minimize the documentation you need to provide for filing. You will have your choice between completing an online questionnaire or providing info over the telephone. Documentation can be uploaded electronically or delivered to the office in paper format. While every case is unique, you generally need to provide proof of ID, two years of tax returns, six months of bank statements, and registration cards for vehicles.
Chapter 7 or Chapter 13
Chapter 7 bankruptcy results in a discharge roughly 120 days after the filing of the bankruptcy. Chapter 13 bankruptcy is a years-long bankruptcy where you make a monthly payment for 36 or 60 months. You receive a discharge after making your last payment. Your bankruptcy attorney will be able to help you decide between Chapter 7 and Chapter 13. Generally speaking, you must pass the Means Test to qualify for Chapter 7. Most clients who choose Chapter 13 do so because of one of the following:
- Too much income
- Too many assets
- A desire to ‘catch up’ on a mortgage or car loan
After a free phone consultation, our office can typically predict for you whether you will need to file Chapter 7 or Chapter 13. From there, you can decide which route is best for you. If neither of the two options is appealing, we can always discuss the option of pursuing debt settlement instead of bankruptcy.
Phase II – Reviewing Your Petition
With the information we gather in Phase I, we prepare a rough draft of your bankruptcy petition. The bankruptcy petition is a document meant to disclose your financial picture to the bankruptcy court. The key to a successful bankruptcy filing is disclosure. We will provide you with a draft of the petition and review it with you for accuracy and completeness.
Phase III – Signing and Filing The Petition
The bankruptcy petition must be signed prior to being filed. Fortunately, the Charlotte bankruptcy court is allowing electronic signatures and electronic filing. This makes the process quite seamless and easy. Once the petition is filed, the court will assign a bankruptcy trustee to the file. The trustee will review your petition prior to the 341 meeting.
Phase IV – The 341 Meeting
The 341 meeting is a short meeting between you, us, and the bankruptcy trustee. These hearings are held either on the phone or in person. The trustee will ask you a few questions about the petition they have reviewed. The trustee will also ask if there are any changes that need to be disclosed. You may be surprised to know that creditors very rarely attend the 341 meeting.
Phase V – Discharge
After the 341 meeting, there is a necessary waiting period meant to give creditors time to file their claims with the court. Once the deadline for this filing passes, the trustee will close your case and the bankruptcy court will enter your discharge. This is the true end of the bankruptcy and the final step in the process.
Reasons To Wait To File Bankruptcy
While the bankruptcy rules are very powerful in favor of the debtor, sometimes it makes sense to wait to file your bankruptcy. Usually, these waiting times are well worth it, and relatively easy to spot if you’ve been honest with your bankruptcy attorney. Because the bankruptcy rules look at a specific window of time regarding your financial activity, waiting an extra month or two to file can sometimes make the difference between a smooth and easy bankruptcy, or a rocky road. Here are a few reasons your bankruptcy attorney may recommend you wait to file:
- Too much income in the past 6 months
- A transfer to a friend or family member in the past year
- A large payment to a creditor in the past 90 days
- A new loan is taken out in the past 90 days
- Credit card use in the last 90 days beyond day-to-day purchases (Luxury items, etc.)
Hearing that you need to wait to file your bankruptcy may be frustrating. It certainly changes the answer to the question “How long does bankruptcy take?” if your attorney is recommending waiting, for the sole purpose of letting a financial item ‘drop off’ of your timeline. However, taking the advice of your bankruptcy attorney prior to filing will pay off for you in the end.
Speak With A Charlotte Bankruptcy Lawyer Today
Considering filing bankruptcy? Give us a call. A short conversation can restore your belief that there are brighter financial times ahead. We love answering questions and we are here to help. You can reach us at 704.749.7747 or click HERE to request a call.
When To File Bankruptcy Chapter 13
Deciding when to file a Chapter 13 bankruptcy should be done with the assistance of your bankruptcy attorney. First, clients must decide whether a Chapter 7 or a Chapter 13 is the best fit for them. Our office gathers information from you over the telephone in order to initially decide this. The analysis is based on your income, your assets, and your debt.
Chapter 7 Is Not Always The Best Option
There are times when a client will have the choice between a Chapter 7 and a Chapter 13 bankruptcy, yet still, choose Chapter 13. In Chapter 7, if you have assets that can not be exempt, the bankruptcy trustee may attempt to sell those assets. Vehicles and homes are two primary examples of such assets. Alternatively, a Chapter 13 trustee will not try to sell your assets. Instead, your payment in Chapter 13 is a function of the equity in those assets.
You may also have transferred to friends or family which could prevent the successful filing of Chapter 7; however, those transfers are treated differently in Chapter 13 and you can still receive your discharge. If a transfer is characterized as a gift or a preference, it may change your monthly Chapter 13 payment. This change is usually insignificant over a five-year repayment plan in Chapter 13.
Once you decide that Chapter 13 is the right option for you, we will help you decide WHEN to file your Chapter 13 bankruptcy.
The Timing Of Your Chapter 13 Filing
There are some instances where the timing of your bankruptcy filing is determined by outside forces. If you are facing a foreclosure, you will need to file prior to the finalization of the foreclosure sale. This filing will halt the foreclosure and allow you to “catch up” on the mortgage during the five-year repayment plan in bankruptcy. Additionally, if a creditor is pursuing a judgment against you, filing prior to the entry of judgment (whenever possible) makes for a smoother filling. In any case, the bankruptcy will address the judgment and the underlying debt.
Tax Debt In Chapter 13
Depending upon the age of your tax debt, it may be advisable to wait a few months or even longer to file your Chapter 13. The difference could mean paying back thousands of dollars vs. paying pennies on the dollar. The rules regarding tax debt and how it is addressed in bankruptcy are complex, but our office will help you sort through the considerations. In any case, Chapter 13 will address all of your tax debt by either treating it as unsecured debt or putting you on a repayment schedule during the five-year repayment time frame.
Vehicle Debt In Chapter 13
Another consideration regarding the filing of your Chapter 13 relates to the age of your automobile debt. If you have a car with a loan balance, we will ask you how long you have been paying on the loan. Depending upon the age of the loan, you may be entitled to reduce the loan balance—and typically the interest rate—by way of your bankruptcy filing. This can produce amazing savings and turn a vehicle into a great asset at the end of Chapter 13 when you receive your discharge.
Speak With A Charlotte Bankruptcy Lawyer Today
Considering filing a Chapter 13? Stop reading a call us. In a few minutes, we can answer your questions, provide peace of mind, and help put together a game plan for addressing your concerns and moving forward. You can reach us at 704.749.7747 or click HERE to request a consultation and an attorney will call you today.
Bankruptcy For Medical Bills
You can file bankruptcy for medical bills. Not only will your medical bills be discharged by the bankruptcy, but your other existing unsecured debt will be discharged by filing bankruptcy as well. While this is sometimes referred to as a Medical Bankruptcy, there is no specific legal term for this. It simply signifies that the primary reason you are filing bankruptcy is due to your medical bills.
Your Medical Bills Must Be At Least 90 Days Old
At the time of your bankruptcy filing, your medical bills must be at least 90 days old. This refers to the date of service which gave rise to the medical bills. If the bills are less than 90 days old at the time of the filing, the medical creditor can assert their rights through the bankruptcy by filing an objection to discharge, or in the alternative, that their bill should survive the bankruptcy. Because of this, we often discuss health concerns with our clients who want to file bankruptcy due to medical bills. If you have an upcoming surgery or large medical expense, we may choose to strategically wait to file your case until after the date of service is more than 90 days old.
Medical Bills Due To Personal Injury
North Carolina can be a challenging state when it comes to medical bills in a personal injury claim. Many times, a personal injury settlement will not address one hundred percent of your medical bills. This means you find that you have settled your personal injury claim for as much money as you can, yet you have remaining medical billing related to the injury. Filing bankruptcy for medical bills will address the remaining medical billing associated with your personal injury.
Assets And Income Still Matter
As with any bankruptcy, if you file bankruptcy for medical bills, you still need to pass the income and assets test in order to file a Chapter 7. Our office will work hand in hand with you to determine if you can file a Chapter 7. In the alternative, Chapter 13 is almost always an option.
Alternatives To Filing Bankruptcy
Often, our firm represents clients in debt settlement or debt negotiations. It may be that the client can not file bankruptcy or does not want to file bankruptcy. In any case, as a bankruptcy firm, we hold special leverage against creditors in the negotiation process. Often, this leads to a great result for the client.
Speak With A Charlotte Bankruptcy Lawyer Today
If you have questions about whether bankruptcy clears the debt, we are here to help. Call us at 704.749.7747 or click HERE to request a free phone consultation. We know you have choices. We hope you choose Layton Law.