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Bankruptcy & Estate Planning Help For Everyday People

Protecting your homeowner status with Chapter 13 bankruptcy

For many people living in North Carolina, their homes may be the biggest asset that they own. As much as a third of their monthly income will go toward paying their mortgage each month. However, people take great pride in their homeownership status, as it is symbolic of the American dream for quite a few people.

Unfortunately, chasing the American dream could endanger your homeowner status. Getting yourself over-extended with credit card spending could leave you vulnerable financially. When you don't have enough money to pay for all of your debt every month, you can quickly fall behind on some bills, an issue which tends to snowball.

Once you start falling behind on your mortgage, you are in real risk of losing your home. Chapter 13 bankruptcy could be a way for you to halt foreclosure proceedings if your lender has just filed. It could also present a unique opportunity to renegotiate the terms of your mortgage.

Chapter 13 bankruptcy involves a meeting with creditors

Those filing for bankruptcy protection will sometimes have to attend a creditors meeting, although an attorney can help you during this process. There is also a creditors meeting for Chapter 7 bankruptcy, but its primary purpose is for creditors to dispute the inclusion of their debt in the bankruptcy proceedings. They don't even happen in some cases.

In Chapter 13 proceedings, creditors can meet with the person filing as a way to negotiate new terms of repayment. In Chapter 13 bankruptcy, individuals don't have to worry about liquidating their assets or meeting an income limit to qualify for a debt discharge. Instead, they simply need to create and then stick to a repayment plan for a predetermined amount of time, often three years.

Unlike many other debts involved in the repayment plan you create, your mortgage will not receive a discharge at the end of your repayment period. Instead, you must reaffirm and renegotiate your mortgage, thereby protecting it from discharge and allowing you to retain the equity you have in your home instead of losing it in bankruptcy proceedings.

Getting help starts by asking for advice

If you are struggling to pay your bills, you need to consider all of your options, including whether either form of bankruptcy might help your situation. Chapter 7 bankruptcy can offer a faster discharge, but it also limits how many assets and how much equity in your home you can exempt from liquidation to repay your creditors.

Chapter 13 bankruptcy can help you get a handle on your debt and take control of your financial future. Sitting down to talk with an experienced North Carolina bankruptcy attorney can help you make a decision that will make the most sense for your current situation and your future.

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