If you’re considering filing bankruptcy in North Carolina, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Filing for bankruptcy is a legal process designed to help individuals and businesses who are facing overwhelming financial difficulties. While bankruptcy laws are federal, they can vary from state to state in some respects, including North Carolina. To determine if you are qualified to file for bankruptcy in North Carolina, it’s essential to understand the basic eligibility criteria and considerations specific to this state.

1. Residency Requirement: To file for bankruptcy in North Carolina, you must meet the residency requirement, which generally means you must have lived in North Carolina for at least 180 days before filing your bankruptcy petition. If you haven’t met this requirement, you may need to file in the state where you have the closest ties or wait until you fulfill the residency requirement.
2. Types of Bankruptcy: There are several types of bankruptcy under the U.S. Bankruptcy Code, but the most common for individuals are Chapter 7 and Chapter 13.
   • Chapter 7: This is often referred to as “liquidation bankruptcy.” To qualify for Chapter 7 bankruptcy in North Carolina, you must pass the means test. The means test compares your income to the median income for a household of your size in North Carolina. If your income is below the median, you typically qualify for Chapter 7. If your income is above the median, you may still be eligible, but you’ll need to complete a more extensive means test to determine your eligibility.
   • Chapter 13: This is known as “reorganization bankruptcy.” In Chapter 13, you create a repayment plan to pay off a portion of your debts over three to five years. You may qualify for Chapter 13 if you have a regular source of income and your debts are within certain limits. Your secured debts (e.g., mortgages, car loans) must be below a specific threshold, and your unsecured debts (e.g., credit card debt, medical bills) must also be within set limits.
3. Credit Counseling Requirement: Before filing for bankruptcy in North Carolina, you must complete a credit counseling course from an approved agency. This requirement is designed to help you explore alternatives to bankruptcy and ensure that you understand the implications of filing for bankruptcy.
4. Mandatory Financial Management Course: After filing for bankruptcy, you must attend a financial management course. This course is intended to help you develop financial skills and strategies to avoid future financial problems.
5. Bankruptcy Petition and Documents: You’ll need to prepare and submit a bankruptcy petition, along with various supporting documents, to the bankruptcy court. This includes a detailed list of your assets, liabilities, income, expenses, and any contracts or leases. Ensuring the accuracy and completeness of these documents is crucial to a successful bankruptcy filing.
6. Bankruptcy Attorney: While not a strict requirement, it is highly recommended that you seek the assistance of a qualified bankruptcy attorney when filing for bankruptcy in North Carolina. Bankruptcy laws are complex, and an attorney can help you navigate the process, assess your eligibility, and ensure that you follow all the necessary procedures.
7. Exemptions: North Carolina allows you to use state or federal bankruptcy exemptions to protect certain assets from liquidation in Chapter 7 bankruptcy. Understanding these exemptions and how they apply to your situation is vital, as they can significantly impact your bankruptcy case’s outcome.
8. Income and Expense Documentation: You must provide accurate documentation of your income and expenses when filing for bankruptcy in North Carolina. The court will scrutinize your financial situation to determine eligibility and the appropriate type of bankruptcy.
9. Prior Bankruptcies: If you have previously filed for bankruptcy and received a discharge, there are waiting periods before you can file again. For Chapter 7, you generally must wait eight years from the date of the previous Chapter 7 discharge to file another Chapter 7 case. For Chapter 13, you typically must wait four years from a previous Chapter 7 discharge and two years from a prior Chapter 13 discharge.
10. Fraudulent Activity: If you have engaged in fraudulent activity or misconduct related to your finances or bankruptcy filings, you may be disqualified from filing or may face additional legal consequences.

Eligibility to file for bankruptcy in North Carolina depends on various factors, including your residency, income, type of debts, and adherence to specific legal requirements. It’s crucial to consult with a qualified bankruptcy attorney to assess your individual circumstances and determine the most appropriate path forward. Bankruptcy is a complex legal process, and professional guidance can help you make informed decisions and navigate the process successfully if you meet the eligibility criteria.

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Do You Need a Lawyer to File For Bankruptcy in North Carolina?

You are not required to hire a lawyer to file for bankruptcy in North Carolina, but it is highly recommended that you do so. Filing for bankruptcy is a complex legal process, and while it’s possible to file pro se (without an attorney), there are several compelling reasons why having an experienced bankruptcy attorney is beneficial:

1. Complex Legal Procedures: Bankruptcy involves a myriad of legal procedures, including preparing and filing the necessary documents, attending court hearings, and negotiating with creditors. An attorney has the expertise and knowledge to guide you through these processes, ensuring that you follow all the rules and requirements correctly.
2. Legal Knowledge: Bankruptcy laws are intricate, and they change over time. A skilled bankruptcy attorney is well-versed in federal and North Carolina bankruptcy laws and can provide advice tailored to your specific situation. They can help you understand the different types of bankruptcy (Chapter 7, Chapter 13, etc.) and determine which one is most suitable for your needs.
3. Protecting Your Interests: An attorney is your advocate and can help protect your rights and interests throughout the bankruptcy process. They can identify potential issues, such as creditor harassment or attempts to seize exempt assets, and take appropriate legal action to address them.
4. Maximizing Exemptions: In North Carolina, you can choose between state and federal bankruptcy exemptions to protect certain assets from liquidation in Chapter 7 bankruptcy. An experienced attorney can help you select the most advantageous set of exemptions to protect your property to the fullest extent allowed by law.
5. Avoiding Costly Mistakes: Filing for bankruptcy involves a substantial amount of paperwork and documentation. An attorney can ensure that all necessary forms are completed accurately and submitted on time, reducing the risk of costly errors or omissions that could lead to complications in your case.
6. Debt Negotiations: If you have secured debts like mortgages or car loans that you wish to modify or restructure, an attorney can help negotiate with creditors to achieve more favorable terms within the bankruptcy process. This can be particularly valuable in Chapter 13 bankruptcy, where you develop a repayment plan.
7. Handling Creditors: Once you file for bankruptcy, creditors are legally prohibited from contacting you or pursuing collections actions. An attorney can deal with creditors on your behalf, providing you with relief from harassment and giving you peace of mind.
8. Court Representation: If your bankruptcy case involves court hearings, an attorney can represent you effectively. They can present your case, respond to any objections, and navigate the legal proceedings on your behalf.
9. Strategic Planning: Bankruptcy is a significant financial decision with long-term implications. An attorney can help you develop a strategic plan that addresses your immediate financial concerns while considering your future financial goals and obligations.
10. Avoiding Dismissals and Denials: Bankruptcy cases can be dismissed or denied if they are not properly prepared or if the debtor does not meet the eligibility criteria. An attorney can help ensure that your case proceeds smoothly and that you meet all the necessary requirements.

While it is possible to file for bankruptcy without an attorney, it’s essential to recognize the potential risks and challenges involved. Mistakes in the bankruptcy process can have serious consequences, including the loss of assets, the denial of discharge, or other legal problems. Given the complexity and importance of bankruptcy, it’s advisable to consult with a qualified bankruptcy attorney who can provide personalized guidance, protect your interests, and increase the likelihood of a successful outcome.

Cost to File Chapter 7 Bankruptcy in North Carolina

The cost to file Chapter 7 bankruptcy in North Carolina includes several fees and expenses that you should be aware of. While the primary fees are set by the federal bankruptcy court, there may be additional costs associated with hiring an attorney and completing mandatory credit counseling and financial management courses. Here’s a breakdown of the main expenses:

1. Court Filing Fee: The primary fee for filing a Chapter 7 bankruptcy case in North Carolina is the court filing fee, which is set by the federal government. This fee is subject to change, so it’s essential to verify the current fee on the official website of the U.S. Courts or by contacting the bankruptcy court in North Carolina.
2. Credit Counseling Fee: Before filing for bankruptcy, you are required to complete a credit counseling course from an approved agency. This typically involves a fee, which can vary depending on the agency you choose. The cost of credit counseling can range from $30 to $60, but some agencies may offer fee waivers or reduced rates based on your income.
3. Financial Management Course Fee: After filing for bankruptcy, you must complete a financial management course from an approved agency. Similar to credit counseling, this course has a fee that can vary, typically in the range of $27 to $57. Like with credit counseling, some agencies may offer discounts or waivers based on your financial situation.
4. Attorney Fees (Optional): While it’s not required to hire an attorney to file for Chapter 7 bankruptcy, many individuals choose to do so to ensure that their case is handled correctly and to receive legal guidance throughout the process. Attorney fees can vary significantly depending on your location, the complexity of your case, and the attorney’s experience. On average, Chapter 7 bankruptcy attorney fees in North Carolina may range from $1,160 to $2,700 or more. It’s crucial to discuss fees with prospective attorneys and understand their pricing structure before hiring one.
5. Miscellaneous Costs: In addition to the above fees, you may encounter other minor expenses, such as costs related to obtaining credit reports or notary fees. These expenses are generally modest and can vary based on individual circumstances.

Ultimately, the total cost of filing Chapter 7 bankruptcy in North Carolina can vary widely based on factors such as your choice of attorney and the fees charged by credit counseling and financial management course providers. It’s advisable to consult with a bankruptcy attorney to understand the specific costs you may incur in your case and to explore options for managing those expenses. Additionally, since fees and regulations can change over time, it’s essential to check with the relevant authorities or consult an attorney to get the most up-to-date information on the costs associated with filing Chapter 7 bankruptcy in North Carolina.

Cost to File Chapter 11 Bankruptcy in North Carolina

Filing for Chapter 11 bankruptcy in North Carolina can be a complex and costly process, especially for businesses and individuals with substantial debts. Chapter 11 bankruptcy is primarily designed for businesses seeking to reorganize their financial affairs and continue operations. The costs associated with filing Chapter 11 bankruptcy can vary widely depending on the complexity of the case and the specific circumstances, but here are some key expenses to consider:

1. Filing Fee: The initial filing fee for a Chapter 11 bankruptcy case in North Carolina is set by the federal government and can change over time. It’s crucial to verify the current fee by checking the official website of the U.S. Courts or contacting the bankruptcy court in North Carolina.
2. Attorney Fees: Chapter 11 bankruptcy cases are highly intricate, involving detailed financial analysis, negotiations with creditors, and the development of a comprehensive reorganization plan. As a result, attorney fees for Chapter 11 cases can be substantial and can vary significantly based on the complexity of the case and the attorney’s experience. Attorney fees can range from tens of thousands of dollars to several hundred thousand dollars or more.
3. Court Costs and Administrative Expenses: Throughout the Chapter 11 bankruptcy process, there may be additional court costs and administrative expenses, such as fees for filing motions, conducting hearings, and retaining professionals such as accountants or financial advisors. These costs can add up, and it’s essential to budget for them accordingly.
4. U.S. Trustee Fees: In Chapter 11 cases, the U.S. Trustee’s Office may assess quarterly fees based on the debtor’s disbursements and income. These fees are intended to cover the cost of overseeing the bankruptcy case. The specific fee structure and amounts can vary based on the debtor’s financial performance during the bankruptcy process.
5. Professional Fees: Debtors in Chapter 11 cases often need to hire professionals, such as financial advisors, appraisers, or consultants, to assist with various aspects of the bankruptcy process. These professionals charge fees for their services, and their costs can be significant, especially in complex cases.
6. Plan Confirmation Costs: Developing and confirming a Chapter 11 reorganization plan can involve additional expenses, including legal and accounting fees associated with plan drafting, creditor negotiations, and the required disclosure statement.
7. Ongoing Operational Costs: During the Chapter 11 process, the debtor must continue to operate its business or manage its affairs. This can involve ongoing operational costs, including payroll, rent, utilities, and other essential expenses. These costs must be addressed as part of the reorganization plan.
8. Miscellaneous Expenses: There may be other miscellaneous expenses that arise during the Chapter 11 process, such as costs related to creditor meetings, notices, or litigation.

It’s important to note that Chapter 11 bankruptcy cases are highly customized and can vary widely in terms of complexity and cost. The specific expenses you’ll incur will depend on the unique circumstances of your case. Given the intricacies of Chapter 11 bankruptcy, it’s strongly recommended to consult with experienced bankruptcy attorneys and financial professionals who can help you assess the potential costs, develop a realistic budget, and navigate the process effectively.

Cost to File Chapter 13 Bankruptcy in North Carolina

The cost to file Chapter 13 bankruptcy in North Carolina includes various fees and expenses associated with the bankruptcy process. Chapter 13 bankruptcy is designed for individuals with regular income who want to create a repayment plan to address their debts over a period of three to five years. Here’s a breakdown of the main expenses:

1. Court Filing Fee: The primary fee for filing a Chapter 13 bankruptcy case in North Carolina is the court filing fee, which is set by the federal government. This fee is subject to change, so it’s essential to verify the current fee on the official website of the U.S. Courts or by contacting the bankruptcy court in North Carolina.
2. Attorney Fees: While it is possible to file a Chapter 13 case without an attorney (pro se), most individuals choose to hire an experienced bankruptcy attorney to navigate the complex legal process effectively. Attorney fees for Chapter 13 cases can vary depending on the complexity of your case and your location, but they generally range from $2,430 to $4,650 or more. Attorneys typically require an upfront retainer fee, and the remainder of their fees can be incorporated into your Chapter 13 repayment plan.
3. Credit Counseling and Financial Management Course Fees: Before filing for Chapter 13 bankruptcy, you must complete a credit counseling course from an approved agency. This typically involves a fee, which can range from $25 to $58. After filing, you’ll also need to complete a financial management course, which incurs a similar fee. Some agencies may offer reduced rates or fee waivers based on your income.
4. Miscellaneous Costs: In addition to the above fees, there may be other minor expenses associated with your Chapter 13 bankruptcy case. These can include costs related to obtaining credit reports, notary fees, postage, and any required documentation.
5. Plan Payment: One of the unique aspects of Chapter 13 bankruptcy is the development of a repayment plan, which outlines how you’ll pay your debts over the course of three to five years. Your plan payment is a significant cost, as it includes payments to your bankruptcy trustee, who distributes the funds to your creditors. The specific amount of your plan payment depends on various factors, including your income, expenses, and the types of debts you have.

It’s important to note that if you cannot afford to pay the court filing fee or attorney fees upfront, you may request permission from the court to include these costs in your Chapter 13 repayment plan. This can make it more manageable to cover these expenses over time.

While hiring an attorney is not mandatory for Chapter 13 bankruptcy, it is highly recommended due to the complexity of the process and the importance of crafting a successful repayment plan. An attorney can provide valuable guidance, ensure that your plan is feasible, and represent your interests throughout the bankruptcy process.

Reliable Bankruptcy Attorneys in North Carolina

Below is a list of reputable bankruptcy attorneys in North Carolina. They can help you with both personal and business bankruptcy information.

Law Offices of John T. Orcutt
1738 Hillandale Rd Suite D, Durham, NC 27705, United States

Duncan Law, LLP
204 Muirs Chapel Rd #310, Greensboro, NC 27410, United States

Bruce Allen, Attorney
1000 Wildwood Dr, Fayetteville, NC 28304, United States

Berggren Law Offices, PLLC
4000 Blue Ridge Rd #150, Raleigh, NC 27612, United States

Blossom Law PLLC
301 S McDowell St UNIT 1103, Charlotte, NC 28204, United States

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Charlotte

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