One of the biggest fears people have in filing bankruptcy is being able to protect their property. Here is the good news – we can almost always protect all of your property. You are entitled to keep a generous amount of your belongings when filing bankruptcy. North Carolina law now provides higher personal exemptions–items that are protected from seizure by your creditors.
It depends. Normally, you must have resided in North Carolina for the greater part of 180 days before you can file a Chapter 7 bankruptcy or Chapter 13 bankruptcy in North Carolina. Under 28 U.S.C Section 1408 of the Bankruptcy Code a person or entity filing a bankruptcy must have resided at least 180 days in the judicial district, or the greater part of the 180 days (91 days) if they were residing in another judicial district.
Are you confused yet?
Generally speaking, you must have resided at least 91 days in the judicial district, such as the Western District (Charlotte area) or Middle District (Greensboro area) of North Carolina before you can file a bankruptcy in this state.
To eliminate this problem, you would normally wait until you had met the residency requirements before you file the bankruptcy. However if you just moved a few days ago to North Carolina from California or another state and you have to file a bankruptcy due to an emergency, you would probably have to file the bankruptcy in the previous state you lived in.
Some judicial districts may allow a resident of one state to file in another state. For example, if you live in Ft. Mill, South Carolina, which is just a mile or two across the North Carolina state line, and you work and shop in North Carolina on a daily basis and have other “connections” to North Carolina, you could probably file the bankruptcy in Charlotte, North Carolina. This is valid only if a creditor does not object to the residency requirements. However, you could not live in Texas and decide to file bankruptcy in North Carolina because you believe the North Carolina laws would be advantageous to you. You would have to file the bankruptcy in Texas.
Also remember even though you may meet the residency requirements to file in North Carolina, you must use the exemptions of the state where you resided two years before you file the bankruptcy. 11 USC 522(b)(3)(A). For example, if you just moved to North Carolina one year ago from Rhode Island you would meet the residency requirements to file in North Carolina, however you would have to use the Rhode Island exemptions to protect your property. (Note: Some states require you use the federal exemptions).
We hope this has helped you to understand the residency requirements to file bankruptcy in North Carolina.
At your Creditor’s Meeting, the Trustee sometimes asks for additional documents. You will have a specific time frame (usually no later than 15 days) to get these documents in to him or her. These need to be sent certified mail, and also mail a copy of what you are sending to the Trustee to our office. If you have not taken your financial management course already, this needs to be done ASAP! You will need to have that notarized and pay your fee ($8 per person). This needs to be turned in to our office, so that we may file that with the court.
*YOUR CASE CANNOT BE DISCHARGED WITHOUT HAVING THE FINANCIAL MANAGEMENT COURSE FILED WITH THE COURT*
Once you have tied your loose ends with the Trustee and have taken the financial management course online, it is more of a waiting game. Normally a Chapter 7 bankruptcy lasts 4-6 months. Your creditors’ meeting is roughly 30 days after you file, so you can guesstimate yourself another 2-5 months of wait time. A Chapter 13 bankruptcy usually lasts 60 months (5 years), with the creditor’s meeting happening roughly 45 days after you file. In Chapter 13’s, continuation of timely payments is essential to staying in the Chapter 13 bankruptcy and receiving a discharge.
A Consent Order is an agreement between you (usually written up by your bankruptcy lawyer) and the mortgage company or homeowner’s association to allow you to get caught on any Chapter 13 bankruptcy payments so you can keep your house. There are a few situations to be aware of when it comes to getting together a consent order.
Charlotte Office Clients:
If you filed a Chapter 13 bankruptcy before July 1, 2009, your Chapter 13 payment does not include your monthly mortgage payment(s) on your house. You must make your mortgage payments directly to your mortgage company. If you have homeowner association dues (HOA), you must also make your payments directly to your homeowners association.
If you filed a Chapter 13 bankruptcy on or after July 1, 2009, your mortgage payment is included in your Chapter 13 payment to the Trustee.
Greensboro Office Clients:
Your Chapter 13 payment may or may not include your mortgage payment. If you were behind on your mortgage payments when you filed the bankruptcy, then your Chapter 13 payment will include your mortgage payment. If you were not behind on your mortgage payments when you filed the bankruptcy, then you had the option of paying the mortgage payment yourself or including the mortgage payment in the bankruptcy. If you are unsure, check with your attorney. If you have homeowner association dues (HOA), you must make your payments directly to your homeowners association.
Charlotte and Greensboro Office Clients:
If you fall behind on your mortgage or HOA payments, the mortgage company or HOA will file a Motion for Relief from Automatic Stay asking the court for permission to foreclose on your property. If your mortgage company or HOA files a Motion for Relief from Stay it is very important you contact your attorney immediately. In many cases your attorney can work out a Consent Order with the mortgage company or HOA’s attorney that would allow you to catch up on the payments you are behind. Your attorney cannot work out a Consent Order with the mortgage company or HOA’s attorney without your assistance and agreement on the terms. The Consent Order may give you one last chance at keeping your property. Failure to comply with the terms in the Consent Order will result in the mortgage company/ HOA getting relief from the automatic stay and being able to proceed with foreclosure.
Contact us today for more information on what happens if you get behind on your mortgage payments while in bankruptcy.
Many people wonder whether or not student loans can be discharged in a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. In almost all circumstances, student loans cannot be discharged. The only time a student loan can be discharged is when there is a hardship on the debtor that makes it impossible for him or her to ever be able to pay off the loan.
This does not apply to a debtor that is unable to pay the debt back in a reasonable time, this applies to debtors that have faced some extreme hardship. This means the debtor would have to become completely incapacitated either physically or mentally, or the hardship is such that the debtor is required to be the main caregiver of an immediate family member because of an injury or accident. It is only in very extreme circumstances that a debtor can discharge student loans in a bankruptcy.
In order to qualify for the ability to wipe out student loans in bankruptcy, there would also have to be a hearing to prove the debtor’s hardship. The ability to wipe out student loans because of hardship is not something that is automatic. It should be understood that in almost all bankruptcy cases student loans will not be discharged.
If we can help you file your Chapter 7 bankruptcy or Chapter 13 bankruptcy contact us today.
Unfortunately, alimony and child support cannot be wiped out in bankruptcy. Alimony and child support are considered “priority” debts that must be repaid. In other words, the bankruptcy laws view alimony and child support as very important debt that one cannot just wipe out with a bankruptcy.
However, if you are behind on your alimony or child support payments, bankruptcy can be helpful for you. If you are behind and have been threatened to go to jail, you could file a Chapter 13 Bankruptcy, which is a repayment plan. In a Chapter 13 bankruptcy, you repay a portion of your debts over a period of three to five years. At the end of your bankruptcy, you will no longer owe any unsecured debt (credit cards, medical bills) and will be caught up on any debts that you were behind on, such as child support.
A Chapter 13 bankruptcy is helpful for a person who is behind on alimony or child support payments because it helps you get caught up on your payments and will avoid any potential jail time. Other than completing a Chapter 13 bankruptcy you cannot wipe out alimony or child support in bankruptcy.
Charlotte: (704) 563-1224
Greensboro: (336) 856-1234
Winston-Salem: (336) 245-4294
