One of the things I enjoy most about practicing bankruptcy law is that most clients have no problem meeting the requirements for filing bankruptcy. When clients realize this, the relief I see on their faces, or hear on the other end of the phone means they are one step closer to leaving financial stresses behind.
Income—While there are a few exceptions, generally clients qualify for a Chapter 7 if they meet the income and assets guidelines set by the federal bankruptcy laws. If you make less than the median income in North Carolina, you automatically qualify. However, most who make more than the median income still qualify by passing what is called the Means Test (something your bankruptcy attorney determines for you).
Assets—Even if you meet the requirements to file bankruptcy, you’ll still need to use the bankruptcy exemptions to protect your assets in bankruptcy. For most clients this is not a problem, as the exemptions are generous and your attorney will work with you to apply them to all of the property you own.
Income—If you have too much income for a Chapter 7, a Chapter 13 is available to you. In a Chapter 13, you pay back a small percentage to your creditors over time in bankruptcy—typically less than 10 percent—but nowhere near what you owe today.
Assets—A Chapter 13 also treats assets differently than a Chapter 7. If you run out of bankruptcy exemptions, you can still use a Chapter 13 to successfully file. Your Chapter 13 payment will reflect the value of any assets you could not protect with the bankruptcy exemptions.
There are bankruptcy requirements related to prior filings. If you’ve filed a bankruptcy in the last eight years, you’ll want to let your attorney know the type of bankruptcy you filed, when it was filed, and whether you received a discharge. In many instances, you’re allowed to file more than one chapter of bankruptcy (Chapter 7 or 13) within the eight year timeframe.
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The easiest way to get your questions answered is to pick up the phone and call us. We can usually answer your questions in one phone call and you’ll save time and energy searching the internet for answers. You can reach us at 704.749.7747. We’re here to help.