Many North Carolina consumers are struggling with their financial obligations, and there are several reasons why this might be so. People can be burdened with extensive credit card debt or medical bills, and the situation can be exacerbated by an unexpected job loss. When other methods of debt relief have failed or are unavailable, some people might consider filing for bankruptcy under Chapter 7. However, not everyone is eligible to do so.
Under Chapter 7, a person’s non-exempt assets are liquidated by a court-appointed trustee, with the proceeds being used to repay creditors. In most cases, any remaining balances on certain types of unsecured debt are discharged, and the process usually takes only a few months. To qualify, however, filers generally must first pass the means test, which compares their income to the median income in the state in which they reside.
In addition, 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 of 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.
Some people are reluctant to take this step because of the adverse effect it has on their credit report. However, there are some benefits to filing as well, including at least a temporary stop to creditor harassment. People can learn more about the debt relief and bankruptcy process by discussing their situation with an experienced attorney.