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Chapter 13 Bankruptcy North Carolina
Overview Of Chapter 13 Bankruptcy
Every day North Carolina families face the danger of losing their automobile or home due to out of control debt. Filing a chapter 13 bankruptcy can often help in these types of crises. The primary goal of chapter 13 is to give debtors relief from creditors while implementing an achievable repayment plan. There are many benefits to filing a Chapter 13 over other types of bankruptcy.
There are many benefits when you file a chapter 13 bankruptcy.
Chapter 13 Bankruptcy…
- can stop the repossession of Mobile Homes and Motor Vehicles.
- can stop foreclosure and give the property owner time to catch up on payments.
- can prevent student loan collections for the period of the repayment plan. Normally up to five years.
- stop the IRS from collecting past due taxes
- stop creditors from collecting past-due support payments
- may allow discharge of non-support marital responsibilities
- may allow the discharge of unsecured debt
- allows for the debtor to keep all of their assets.
If you or a family member are considering filing for bankruptcy, call King Law Firm today. Our experienced lawyers can review your information and help you make the right decision that best fits your financial problems. Our team of attorneys, paralegals are here to assist you and make the entire bankruptcy process as easy as possible.
What Is Involved When Filing A Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy plan allows those with a steady income to submit a plan to pay all or a portion of their debts back within a time period. The repayment plan can be between three and five years. A Chapter 13 Bankruptcy is also known as a wage earner’s plan or individual debt adjustment,
The first step when filing a Chapter 13 is to determine if your debt is within the chapter 13 debt limit. When filing a chapter 13 debt reorganization plan, your debt must not exceed $419,275 in unsecured debt or $1,257,850 in secured debt.
When your bankruptcy lawyer submits your plan to the Eastern District of North Carolina, he will have proposed payment amounts to various debtors. Your first payment will be due on the first day of the month after the filing date of your case.
When you file your chapter 13 petition, you will receive an automatic stay which provides immediate legal protection from all of your creditors.
The court requires anyone filing for a chapter 13 reorganization plan to attend a two-hour financial management course. You have the choice of taking the class live or online. Taking this class is required to be completed before your discharge
You are required to attend your 341 meetings, also known as a meeting of creditors. You will have to answer questions regarding your debt and your proposed repayment plan we discussed earlier. During this time, you will be allowed to make adjustments to your plan if necessary.
Confirmation of your repayment plan. A North Carolina bankruptcy judge must confirm your repayment plan. On occasion, a trustee or creditor may object to your confirmation, which would make having a hearing necessary.
Once the North Carolina Bankruptcy Court confirms your plan, all debtors must conform to the plan. In many cases, your monthly payments are deducted from your payroll. The case can be dismissed if the debtor does not conform to the plan.
If the court does not confirm the plan, the debtor has the option of filing a modified plan. The debtor may also convert the case from chapter 13 to a chapter 7 liquidation.
When the debtor completes the repayment plan, usually within three to five years, the court will grant a discharge of debt.
Chapter 13 Bankruptcy Information You Need To Know.
Depending on how monthly income compares to state median income, a Chapter 13 repayment plan lasts between three to five years. Chapter 13 does not require the debtor to liquidate assets; however, you may if you find it more appropriate as opposed to paying all the repayment plan payments from your income.
North Carolina Chapter 13 Bankruptcy Plan – Things To Consider
If you plan on keeping your house all mortgage payments ongoing and any back payments will be paid through the chapter 13 bankruptcy plan.
Attorney fees, domestic support, and certain taxes known as priority claims must be paid in full over the time span of the Chapter 13 plan.
At the time of your chapter 13 bankruptcy, you may decide to surrender your vehicle, make payments directly to the creditor, or make payments through your chapter 13 repayment plan. Keep in mind, if payments are made through the plan, the loan may be able to be restructured.
When entering into chapter 13, you must agree to give your disposable income to the plan for the entire duration. Disposable income is calculated by HH income for the past six months and then deducting allowances and expenditures that are permitted by law.
Any taxes on real property can be paid through the wage-earner plan at nine percent, and any Tax obligations secured with a tax lien must be paid in full at four percent.
Different Types of North Carolina Bankruptcy Claims
Creditor claims are categorized into three areas, priority, secured, and unsecured.
Secured Claims: A secured claim is a debt that has a physical item that can be repossessed if the creditor defaults on the debt — items such as an automobile, motorcycle, expensive lawnmower, or even a diamond ring. To keep the collateral, the debtor must agree to pay the creditor the value of the collateral.
Unsecured Claims: An unsecured claim are those without collateral. Credit card debt and medical bills are all considered unsecured claims. None-priority unsecured claims do not have to be paid in full under the chapter 13 bankruptcy plan. However, projected disposable income has to be paid toward these claims throughout chapter 13. An unsecured creditor must receive what would have been paid if the assets had been liquidated under a chapter 7 bankruptcy.
Priority Claims: Under North Carolina law, Priority Claims receive special status. Priority claims are most unpaid taxes and the cost of the bankruptcy. Generally, a chapter 13 plan is required to pay all priority claims in full.
King Law Firm has been assisting North Carolinians for over 30 years. Our experienced attorneys and paralegals are here to help you any way we can. We understand how difficult it is when you are experiencing financial hardships.
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