Contrary to popular belief, you don’t have to lose everything when you file for bankruptcy in North Carolina. If you file for Chapter 13, you won’t have to give up your assets at all. If you file for Chapter 7, you might have to relinquish some assets, but the law regulates what your creditors can take.
Do you lose your assets during bankruptcy?
If you file for Chapter 7 bankruptcy, you might have to give up some of your assets. Chapter 7 bankruptcy helps you pay off your debts by having the trustee sell off some of your properties. However, you won’t have to give up anything that’s exempt under the law. Exempt assets can include clothes, personal items, vehicles, savings accounts and even your house in certain situations.
You won’t have to give up anything if you file for Chapter 13. Under Chapter 13 bankruptcy, you won’t sell off your assets to pay your debts–instead, you’ll create a payment plan that allows you to repay your debts over three to five years. Your bankruptcy attorney could help you write a repayment plan and get your finances back on track. If you have property that you don’t mind giving up, you have the option of selling that property to reduce your debts.
How do you file for bankruptcy?
Before you file for bankruptcy, you’ll have to determine whether you qualify for Chapter 7 or Chapter 13. Chapter 7 wipes out most of your debts but involves the sale of major assets. Conversely, Chapter 13 lets you keep your assets but also requires more responsibility. An attorney could explain the eligibility requirements for each chapter.