Filing for bankruptcy can be a confusing and intimidating process. Knowing what to do to file your personal bankruptcy in North Carolina can reduce the stress and make the process smoother.
First, you should speak to a bankruptcy attorney or attorneys to make sure that you have absolutely no other means of handling your debt. Most bankruptcy attorneys will offer to speak with you at no charge to help you assess your situation. They will help you determine if you are eligible to file, look for alternatives to bankruptcy if there are any and give you an idea of how your life will be affected once you've been declared bankrupt.
If you decide to proceed with the bankruptcy, you will then need to decide if you're going to retain an attorney or file the proceedings yourself. While it is possible to handle your case on your own, many people choose to enlist the help of an attorney to guide them through the process.
To file for Chapter 7, you will need to do a means test to determine if you are truly insolvent. Your previous six months of income will be measured against a median income scale to determine if you pass or fail the means test. The means test determines whether or not if, after your other obligations are met, your monthly income will allow you to repay your debt. According to the North Carolina bankruptcy law website, as of 2011, you will probably qualify for Chapter 7 if you are unable to pay at least $6,000 over the next five years.
If you pass the means test, you will next need to determine how much of your property is exempt. This means listing all of your assets and determining their worth and measuring that against what the bankruptcy court says you are allowed to keep. Generally, a certain amount of equity in your home and vehicles is considered exempt, retirement accounts, and a certain amount of cash and personal possessions. Any property that is not exempt may be liquidated and used to repay your creditors.
Once you've determined which of your property is exempt, you will then be required to attend a mandatory credit counseling class. You must provide proof of your attendance to the court along with your filing.
Next, you will need to complete the bankruptcy paperwork, including but not limited to: the actual bankruptcy petition, your filing fee or fee waiver request, the list of creditors you are claiming in the bankruptcy, statement of your social security information, verification of your credit counseling attendance, notice to your debtors, and your list of exempt property. These will need to be filled out, copied, and filed with the local court.
Meet with the court-appointed trustee who will take possession of any property you are not allowed to keep. The trustee will liquidate any of said property and use it to pay your creditors.
Attend a 341 hearing or meeting of creditors. This meeting gives creditors the opportunity to appear to question your filing and offer any challenges to prevent you from completing the bankruptcy. While the opportunity is available, most creditors do not actually appear.
If your bankruptcy is not challenged, then the next step is to file any motions or claims for exemption pertaining to your case. You will also need to reaffirm any secured debts, such as mortgages or car loans, that you will continue to pay on after bankruptcy. Once these steps are completed, the court will issue a Discharge Order which will declare you bankrupt and wipe out your debts for good. Once you receive your discharge order, usually within 90 days of filing, you are no longer legally liable for the debts included in the bankruptcy.