Durham Chapter 7 Bankruptcy Attorneys Working For Your Debt-Free Future

Last updated on October 3, 2024

For many people who have unsurmountable debt, the idea of a fresh start can seem like a myth or a fantasy. When the bills keep piling up and the income simply cannot cover it, many people begin to despair and feel like there are no solutions. Speaking with a compassionate Durham bankruptcy lawyer may give you the peace of mind you need to move to your brighter future.

Get a fresh start through Chapter 7 bankruptcy ∙ Contact Wootton & Wootton ∙ 919-794-8660

At Wootton & Wootton, our Durham bankruptcy lawyers have a wealth of experience helping North Carolina clients find a fresh start through Chapter 7 bankruptcy. With more than 40 years of combined legal experience, we can help you understand your bankruptcy options, file for bankruptcy and go through the entire process. We will use our experience to help you through every step.

About Chapter 7 Bankruptcy

Chapter 7 is often considered the debt liquidation option. It allows those who qualify to discharge their unsecured debt and get a fresh financial start.

Some important points about bankruptcy:

• You do not have to lose everything: Between the bankruptcy exemptions allowed by North Carolina and the possibility of retaining good debt that you can still manage to afford, you might be surprised by how much you can keep in Chapter 7 bankruptcy.
• The process is simpler than you might think: In fact, we will do all the work for you. Once you bring in your essential financial documents, we will provide you with exceptional legal counsel backed by experience, and we will walk you through every step involved in filing for bankruptcy.
• The Chapter 7 process is quicker than you might think: Many people are surprised to learn that their unsecured debts can be discharged within three or four months.

Contact us for a free initial consultation. We will look at your financial situation and help you understand every aspect of your possible Chapter 7 bankruptcy claim.

How Do I Know If I Qualify For Chapter 7?

When deciding who is eligible for Chapter 7, the bankruptcy court will turn to something known as a means test in order to gain an in-depth understanding of your financial situation. If you pass the means test, you are eligible to file for Chapter 7. If you do not pass, you still have other options. Since the test looks only at your finances for the previous six months, you could always wait and try again. Alternatively, you could file for Chapter 13 bankruptcy instead, which will allow you to restructure your debt.

The first part of the means test is based on your income for the last six months. If your level of income is below the median income for your state, you will automatically qualify to file for Chapter 7. Most people who take the test will qualify based on this criterion alone.

However, for those who do not, there is a second step to the process. The bankruptcy court will also take into account your expenses. The burden of reporting expenses accurately falls on you, so be sure to include everything you can think of from living expenses to groceries to your car. Your total income minus your allowable expenses will be your disposable income, and if that number is low enough, Chapter 7 may still be an option.

A consumer Chapter 7 filing can only be made by individuals or married couples and not corporations, partnerships or limited liability companies. There is a credit counseling requirement as well, and this has to be received from an agency approved by the government and completed no more than 180 days after the discharge date. Certain people are ineligible to file, such as those who have had a petition dismissed within the previous 180 days due to abuse of the system, a violation of a court order or other reasons.

Chapter 7 Vs. Debt Consolidation

It’s common to notice advertisements for products or services when you need them and to tune them out the rest of the time. If you’ve been struggling with your finances, you may have noticed that there seem to be a lot of debt consolidation and debt relief programs that are advertised both on the television and the radio. However, you should keep in mind that it costs a lot of money to purchase that advertisement space. Those companies turn a tidy profit off of a service that they like to pretend they do for nothing.

One of the many reasons why debt consolidation can actually be dangerous for those struggling financially is that using a lump-sum payment to reduce the balance on your credit cards means that there’s more money to spend on your credit cards. You could wind up carrying the debt consolidation loan and maxing your credit cards out again if you are still struggling to cover your daily cost-of-living expenses. Instead of offering a solution, debt consolidation loans could leave you much farther in debt than you were when you first applied for their so-called “help.”

Consolidating or partially reducing your existing debts won’t address the issue of having an outstanding amount that you owe or the fact that your income-to-debt ratio is no longer sustainable. Debt consolidation programs can make you feel like you are in control, but they aren’t really a solution. You still have a substantial amount of outstanding debt impacting your credit and likely need to spend a large portion of your disposable income each month repaying creditors. Instead of just moving debt from one location to another, Chapter 7 bankruptcy allows you to get rid of that debt.

Debt consolidation programs simply move your debt from the control of individual creditors to one company. Sometimes, that move can feel beneficial because you pay a slightly lower interest rate or have lower monthly payments. The fact remains that you will still have to repay those debts in full. In Chapter 7 bankruptcy, those debts become a nonissue for your financial future. Provided that you qualify and successfully complete your bankruptcy proceedings, the result will be a discharge of your unsecured debts, such as credit card and medical debt.

Chapter 7 Exemptions

Certain property and assets may be protected through the Chapter 7 bankruptcy process that the filing party should be familiar with:

• Home: Homestead exemptions may protect a certain amount of equity in the filing party’s home.
• Car: Exemptions for a certain amount of value in the filing party’s car may protect the filing party’s car.
• Personal property: Personal property exemptions may provide protections for clothing, jewelry, appliances and household items such as home furnishings.
• Wild card: Wild card exemptions may provide protection for categories of property that are not included in the enumerated exemptions or have reached the limit for the exemption category type.

Steps To Take After Chapter 7

After filing Chapter 7, taking the following steps can offer you crucial protection during bankruptcy proceedings and put you in a strong position afterward:

• Start an emergency fund: Create an emergency fund and add to it – even just a dollar here and there – as often as possible. It might take time to build a sizable amount, but it can help you avoid future debt-related hardships should an emergency arise.
• Save all bankruptcy documentation: Preserve all paperwork related to your bankruptcy case from the moment it begins until you obtain a final discharge. Having this information serves your interests in at least two ways. You can show it to potential lenders to remain transparent about your financial situation. You can show it to creditors as proof of your bankruptcy if they try to collect on an old debt.
• Stay on a steady course: Eventually, you may want to obtain new credit or take on a mortgage. Maintaining a stable residence and occupation is an effective way of showing potential creditors and lenders that you can manage new debt responsibly. The wake of bankruptcy is not generally a good time to switch careers or make other drastic life changes.

When Is Chapter 7 A Good Idea

Chapter 7 may be an appropriate option in these situations:

• When you have a low income: It’s usually only possible to file for Chapter 7 bankruptcy when you have an income that is lower than the median household income for a family of your size in North Carolina.
• When your debts are too overwhelming to tackle alone: Chapter 13 bankruptcy is a great choice if you have an income high enough to pay back your debts over time. However, if you do not have any significant disposable income and your debts are very high, Chapter 7 will likely be a better option.
• When you have huge medical or credit card debt: It’s common for those with medical or credit card debt to file for Chapter 7 bankruptcy. This is because filing will enable debtors to quickly liquidate their assets to pay back the debt, and they will likely benefit from a complete debt discharge.
• When you are at risk of going through foreclosure: Filing for Chapter 7 bankruptcy will not guarantee that you will be able to keep your home if you are already facing foreclosure. However, it will enable you to put an automatic stay in place as soon as you file for bankruptcy, meaning that creditors will not be able to take any further action against you.

No Hourly Rates ∙ Flat Fees ∙ No Fees Due Until You File

Obviously, one of the chief concerns for people facing serious debt problems is the cost of filing for bankruptcy. It is unfortunate, but many people believe that they cannot afford to file for bankruptcy because the attorney fees are too high! That is more myth than fact. There is no charge and no risk in scheduling a call with one of our Durham bankruptcy lawyers. We will explain your options, the true cost and allow you to make the decision on whether bankruptcy is the right choice for you. Eliminating your debt may seem daunting, but the low cost to stop creditor harassment and eliminate your debt may provide the peace of mind you deserve.

When you file for Chapter 7 bankruptcy with Wootton & Wootton, you will pay one flat fee, so there will be no surprises. Also, that fee will not be charged until you are ready to file. Call 919-794-8660, text our office at 919-382-3065 or email us to learn more. Consultations are available in person, over the phone or through videoconferencing.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.