Chapter 7 Bankruptcy Lawyers in Chatham County
Are you drowning in unmanageable debt? Bankruptcy may allow you to get financial relief and make a fresh start. The bankruptcy attorneys at the Sasser Law Firm may be able to help. Our office is located at the intersection of US 1 and 64 and is a reasonable drive from Pittsboro, Moncure, Siler City, etc.
For more than 20 years, the Sasser Law Firm has helped individuals in Chatham County and throughout the Triangle seek relief from crushing financial debt. Federal bankruptcy law provides legal tools to help people overwhelmed by debt seek relief so they can move forward.
Our firm has filed over 10,000 cases over the last 20 years. Contact the Sasser Law Firm at (919) 319-7400 to learn how we can help you today.
Who Qualifies for Chapter 7 Bankruptcy?
Chapter 7 is a common type of bankruptcy. People who have unmanageable debt may qualify for relief under Chapter 7 of the U.S. Bankruptcy Code. If you have primarily consumer debt and surplus income then your Chapter 7 can be challenged as abusive.
A knowledgeable bankruptcy attorney at Sasser Law can review your financial situation and help you determine whether you qualify for a Chapter 7 bankruptcy or another type of relief.
What Is the Chapter 7 Means Test?
Each bankruptcy case has unique factors. Not everyone is eligible for Chapter 7 bankruptcy. In bankruptcy law, a means test is used to determine whether an individual is eligible for Chapter 7 bankruptcy where the debts are primarily consumer in nature. The means test has two steps:
- Monthly income – Your average monthly income in the previous six months must be lower than the median income of a similar-sized North Carolina family. The Census Bureau publishes the median income in each state according to family size. If your income is less than the median family income in North Carolina, then you are normally eligible for Chapter 7 bankruptcy. If your income exceeds that, you must move to the next step.
- Monthly income less expenses – In the second step, your monthly income, expenses, and unsecured debt will be plugged into a formula that measures your ability to make payments on your debt. This can be fact-intensive since some categories are based on your actual spending as opposed to set amounts. It is important to be honest and accurate. If the formula shows you have enough disposable income to pay down your debts, you may not be presumptively eligible for Chapter 7. If the court deems your filing to be abusive then you will have the option to convert to Chapter 13 bankruptcy.
Are There Other Chapter 7 Bankruptcy Requirements?
Once you pass the means test, there are other conditions you must satisfy before you are eligible to file for Chapter 7 bankruptcy:
- You must get credit counseling from an approved credit counseling agency within 180 days of filing.
- You must not have received a Chapter 7 discharge in a case filed within the last eight years.
- You must not have had a previous Chapter 7 or Chapter 13 case dismissed by the court within the last 180 days because you violated a court order.
- You must not have attempted to defraud the trustee or the court in terms of your disclosures. Also, you must not have sold assets to friends or family for less than fair market value.
What Are the Pros and Cons of Filing for Chapter 7 Bankruptcy?
While Chapter 7 bankruptcy can offer a fresh start to people drowning in debt, it does come with consequences. Here are some pros and cons:
Pros of Chapter 7 Bankruptcy
- Discharge debts – The primary benefit of Chapter 7 bankruptcy is that it allows for the discharge of most unsecured debts, such as credit card debt, medical bills, and personal loans. This can provide a fresh start and lift a tremendous weight off your shoulders.
- Automatic stay – When you file for Chapter 7 bankruptcy, the judge will issue an automatic stay, halting most collection actions by creditors. This means most wage garnishments, foreclosure proceedings, and creditor harassment will stop.
- Exemptions – Each state has its own set of bankruptcy exemptions that determine which assets you can keep during bankruptcy. In North Carolina, you may be able to save your home and vehicle depending on the amount of equity you have in the assets.
- Quick process – Chapter 7 bankruptcy typically takes just a few months to complete, allowing you to move forward relatively quickly.
Cons of Chapter 7 Bankruptcy
- Credit impact – Filing for bankruptcy will negatively affect your credit score for years. A Chapter 7 bankruptcy stays on your credit report for up to ten years, making obtaining new credit or loans more challenging.
- Non-dischargeable debts – Not all debts can be discharged in Chapter 7 bankruptcy. Common examples would be certain categories of tax debt, student loan debt and domestic debt.
- Liquidated assets – While some assets are exempt, the trustee may sell non-exempt propert you own.
- Public record – Bankruptcy filings are public records. Members of the public can learn that you filed for Chapter 7 bankruptcy.
Are There Certain Debts That Cannot Be Erased in Bankruptcy?
Certain debts, called non-dischargeable debts, cannot be erased through bankruptcy. Some common examples of non-dischargeable debts:
- Child support
- Student loans
- Income tax debts that are from the last few years or where you did not file the returns more than 2 years prior to the bankruptcy filing.
- Criminal fines and penalties
- Personal injury or wrongful death debts for driving under the influence
Are There Alternatives to Chapter 7 Bankruptcy?
Depending on your financial situation, Chapter 7 bankruptcy may not be the best option for you. Our lawyers can help you consider alternatives to filing for bankruptcy, such as the following:
- Negotiating with creditors.
- Selling assets
- Doing nothing at all.
Contact Our Cary bankruptcy attorneys serving Chatham County
If you are struggling with too much debt and have questions about whether bankruptcy is a reasonable option to help you regain financial control, contact a compassionate bankruptcy lawyer at Sasser Law Firm. Our attorneys can guide you through the bankruptcy process. We can help you take the steps necessary to make a fresh start. Contact the Sasser Law Firm today at (919) 319-7400.