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Bankruptcy and debt laws are federal laws in Raleigh and across the United States, however, local rules and exemptions may also apply. Bankruptcy is a process where a person legally declares their inability to pay off their debts. Bankruptcy and debt laws exist to offer a solution to individuals and businesses who are weighed down by excessive debt. They can either eliminate (Chapter 7) or develop a plan to repay debts (Chapter 13). They are designed to give the debtor a financial fresh start.
People often need a lawyer in situations of overwhelming debts, dealing with collection efforts by creditors or facing wage garnishment or repossession of assets. If you are considering bankruptcy, a lawyer can guide you as complex legal procedures are involved. They help by giving advice about your eligibility for bankruptcy, understanding different chapters of bankruptcy, and preparing and filing the required documents.
Although federal law primarily governs bankruptcy, local laws and procedures in Raleigh also play a part. North Carolina has its own set of exemptions that you can use when filing for bankruptcy, known as North Carolina General Statutes section 1C-1601(a). For instance, Raleigh debtors can benefit from a homestead exemption up to $35,000, personal property exemption, and a 'wildcard' exemption of up to $5000 among others.
Although you can file for bankruptcy without a lawyer, known as 'pro se,' it's generally not advisable due to the complexity of bankruptcy laws and rules. Bankruptcy has long-term financial and legal outcomes. Therefore, hiring a competent attorney is highly recommended.
While many debts may be discharged in bankruptcy, some such as child support, alimony, certain taxes, and student loans typically can't be eliminated.
You can file for Chapter 7 bankruptcy once every eight years. For Chapter 13 bankruptcy, technically there is no limit to how many times you can file, however, there are limits on discharge.
Bankruptcy does negatively affect your credit in the short term and can remain on your credit report for up to ten years. However, many debtors begin rebuilding their credit soon after their bankruptcy discharge.
Chapter 7 is known as liquidation bankruptcy where most of your debts are wiped out. Chapter 13, on the other hand, is a reorganization bankruptcy where you repay your debts through a three- to five-year repayment plan.
The United States Trustee Program, part of the Department of Justice, is a useful resource for information on bankruptcy laws and procedures in Raleigh. For detailed information about exemptions, refer to North Carolina General Statutes.
If you consider legal assistance in bankruptcy and debt, start by researching reputable attorneys in Raleigh, NC. Schedule consultations to discuss your situation and possible legal solutions. Make sure to prepare all necessary documentation of your financial situation for attorney review.
