North Carolina Chapter 13 Bankruptcy
If you are in danger of losing your home to foreclosure or having your vehicle repossessed, you may want to consider filing for Chapter 13 bankruptcy protection. Filing for North Carolina Chapter 13 Bankruptcy can be done in emergency situations or as a planned maneuver. However, the goal is always the same: to give debtors a break from creditors while they work on a realistic and achievable repayment plan.
Some of the benefits of filing for Chapter 13 bankruptcy include:
- Stops foreclosure and provides the property owner an opportunity to bring current the arrears over time
- Stops vehicle and mobile home repossessions and may provide an opportunity to restructure these obligations
- Provides relief from student loan collection actions for the duration of the repayment plan (up to five years)
- Provides protection from creditors seeking to collect past-due domestic support obligations
- Provides protection from taxing authorities attempting to collect past-due taxes
- May allow for the stripping off of fully unsecured junior mortgages on residential real property
- May allow for the impairment and discharge of non-support marital obligations
- May allow for the impairment and discharge of unsecured debts
- Allows for the debtor to retain all of their assets (although a plan can propose for the liquidation of some assets if that is beneficial to the debtor)
If you are considering filing for Chapter 13 in North Carolina, contact our board-certified North Carolina bankruptcy attorneys today to discuss your options. You may also want to review the basics of North Carolina chapter 13 bankruptcy as established by the government. We will review your case for free, and you do not need to pay us any fees upfront to file a case. Instead, all fees and costs related to the bankruptcy filing can be rolled into your eventual payment plan.
What to Expect from Our NC Bankruptcy Law Firm
When you contact our NC bankruptcy law firm, you can expect friendly customer service and sound advice to help you move forward.
Clients often choose to work with the Sasser Law Firm because we provide:
- Attorney accessibility. At Sasser Law Firm your consultation and signing appointments will be with an attorney and throughout your North Carolina chapter 13 bankruptcy case, the firm’s attorneys are accessible.
- Thorough case evaluations. Our North Carolina attorneys will review your household income, assets, expenses, and the kind of debt you have to determine what your options are.
- Honesty and integrity. We will be straightforward about whether we think filing for bankruptcy is right for you. This is a big decision, and we will not pressure you into making a move you are not comfortable with. We will also tell you if we don’t think bankruptcy is appropriate based on the fact.
- Estimated repayment amount. Our goal is to project as closely as possible what the final Chapter 13 repayment amount will be based on the facts we are provided. We also aim to make the Chapter 13 plan payment as short and as low as possible.
- Quick action. To protect against the foreclosure of a home or vehicle repossession, we often file Chapter 13 bankruptcy cases on an expedited basis ─ sometimes on the very day, a client first walks in the door.
- Tenacious representation. Some chapter 13 cases are filed, confirmed, performed, and discharged without difficulty. But if issues arise during the case we will fight for you. Plan confirmation does not end our involvement in seeking to represent you and assist you.
If you are considering whether a Chapter 13 bankruptcy is the right move for you, schedule a free consultation with our team in North Carolina today. Our consultations are intended to be helpful regardless of whether you decide to hire us.
How Does Filing Chapter 13 Bankruptcy in North Carolina Work?
A Chapter 13 bankruptcy, also known as a wage earner’s plan or individual debt adjustment, allows people with a steady income to propose a plan to pay all or a portion of their debts. These payments can last three to five years.
In general, the process of filing for Chapter 13 bankruptcy includes:
- Determining whether you fall within the Chapter 13 debt limit. This is the dollar amount limit on how much debt an individual can have and file a Chapter 13 reorganization case. As of April 1, 2019 debt limits are increased, in order to qualify to file a wage earner plan reorganization case, you must not exceed the current limit of $2,750,000.
- Filing a Chapter 13 bankruptcy petition, which triggers an automatic stay, provides immediate legal protection from creditors.
- Submitting an individualized plan that details proposed payments and how the various debts will be treated. (In the Eastern District of North Carolina, the first payment is due the first day of the month following the filing of the case.)
- Attending a 2-hour financial management course on the internet or in person. This is required to be taken prior to your discharge.
- Attending a meeting of creditors, also known as a 341 meeting. Here, with the help of your attorney, you will answer questions about your debts and your proposed payment plan.
- Confirmation of the plan. The plan must be confirmed by the North Carolina bankruptcy judge. Although many plan confirmations are not contested, a party in interest such as a trustee or creditor may object to confirmation which would necessitate a hearing.
If the North Carolina Bankruptcy Court confirms the plan, the debtor must perform as proposed in the plan. Often, payments are made through payroll deduction. If the debtor does not perform under the plan, the case will be dismissed.
If the court does not confirm the plan, the debtor may choose to file a modified plan or convert the case to a Chapter 7 liquidation.
Once the debtor completes the payment plan, the court grants a discharge of debts, giving the person a fresh start.
What You Need to Know About Payment in a Chapter 13 Plan
A Chapter 13 payment plan will last as long as five years. Although you are not required to liquidate assets in a wage earner plan case, you can if you find that more appropriate than cash-flowing all the plan payments out of your income.
Here are some factors to consider when working on a NC Chapter 13 bankruptcy plan:
- You may decide to surrender your vehicle, make direct payments to the creditor, or make payments through the Chapter 13 plan. If you decide to pay through the plan, you may be able to restructure the loan.
- Priority claims (certain taxes, domestic support, attorney fees, etc.) must be paid in full without interest over the life of the Chapter 13 plan.
- Creditors must be paid at least as much in Chapter 13 as they would have received in Chapter 7. This is referred to as the “liquidation test.”
- You must devote your disposable income to the Chapter 13 plan for the duration of the plan. Disposable income is generally calculated by tabulating your household income for the prior six months and deducting various allowances and expenditures permitted by law.
Although many wage earner plan cases do result in a reduction of the debt owed to general unsecured creditors (e.g. credit cards, medical bills, etc.), the liquidation test and/or disposable income test may mean you are required to pay your debts in full. However, you would still receive the benefit of the protection the Chapter 13 filing provides while you work toward a clean slate.
Types of Claims in North Carolina Bankruptcy Cases
Claims from creditors will be categorized as priority, secured, and unsecured.
- Priority claims are given special status under bankruptcy law. Priority claims include most taxes and the cost of the bankruptcy proceeding. In general, a Chapter 13 plan must pay priority claims in full.
- Secured claims involve those with collateral (such as a vehicle), where the creditor can take back the property if the debt is not paid. In order to keep the collateral, the debtor must pay the creditor at least the value of the collateral.
- Unsecured claims are those without collateral, such as medical bills, credit card debt, and personal loans. Non-priority unsecured claims do not need to be paid in full under the plan, but projected disposable income must go toward these claims throughout the “applicable commitment period.” Unsecured creditors must receive at least what they would have been paid if assets had been liquidated under a Chapter 7 bankruptcy.
Types of Wage Earner Cases We Handle
For more than 15 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. We have extensive experience handling:
- Emergency Chapter 13 cases
- Refiled Chapter 13 cases (where a debtor has been in a prior case)
- Cases where a debtor owns a business or is self-employed
- Cases where the debtor has tax problems
- Cases where the debtor has domestic obligations
We also welcome complex cases that are likely to require litigation and appeal. So far, our skilled North Carolina Chapter 13 bankruptcy attorneys have helped more than 7,000 people and businesses get the financial relief they need.
Let Our North Carolina Chapter 13 Bankruptcy Lawyers Help You
Schedule a free consultation with our North Carolina bankruptcy law firm today to discuss whether Chapter 13 might be an option for you. Our bankruptcy lawyers work with individuals and businesses throughout North Carolina, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties.