It is important to know the basics of Chapter 7 Bankruptcy before you file in Winston-Salem.
Chapter 7 Bankruptcy is one option that many individuals and business owners may choose to help them satisfy debts they cannot pay in Winston-Salem, North Carolina. At Meadows & Aderhold, P.A., we are well-versed in bankruptcy law and believe it is important to know the basics of Chapter 7 Bankruptcy before you file.
- Chapter 7 Bankruptcy (also called a straight or liquidation bankruptcy) is the most commonly filed type of bankruptcy.
- Prior to filing, you will need to gather all financial records, which will be used to fill out the initial bankruptcy petition, which is then provided to the court.
- The court will appoint a trustee to oversee your case. The trustee is responsible for accounting for all of your assets and distributing money to any creditors who file proper claims during the bankruptcy proceedings.
- Some of your property and assets may be exempt from Chapter 7 Bankruptcy. For example, you may be able to keep your 401K savings.
- Before being approved for Chapter 7 Bankruptcy, you must pass the “Means Test” calculation, which compares your income against the median income in the State of North Carolina. This determines whether you do or do not make enough money to pay your financial obligations. If the “Means Test” is not passed, you may need to file Chapter 13 Bankruptcy as an alternative.
- During Chapter 7 Bankruptcy, you will be asked to complete a financial management course to ensure you know the best steps to maintain your financial independence going forward.
- Once the necessary steps have been taken to satisfy creditors, the court will provide you with a discharge, which prevents creditors from attempting to collect any additional debt against you.
Before filing Chapter 7 Bankruptcy, you will be asked to see a credit counselor who may be able to provide alternatives to filing for bankruptcy. At Meadows & Aderhold, P.A., we can discuss your options and help you determine if filing for bankruptcy is truly the best solution. Bankruptcy of any type should be a last resort.
If you would like to speak with a bankruptcy attorney, contact us today to schedule a consultation.