If you are having trouble staying current on unsecured debts, it may be possible to eliminate them through Chapter 7 bankruptcy. However, there is a chance that a North Carolina judge may require you to file for Chapter 13 protection. There are several reasons why this could be the case.
Did you fail the means test?
The means test compares your household income to the median in the state where you live. If your household income exceeds this threshold, you may be required to file for a reorganization bankruptcy. A judge might also reject your request to eliminate debt balances through a Chapter 7 proceeding if you have enough money available to pay at least a portion of what you owe.
Have you received a discharge in a previous Chapter 7 case?
You are typically not eligible to file for Chapter 7 bankruptcy more than once over a period of eight years. For example, if you received a discharge in a liquidation proceeding five years ago, you would have to wait at least three more years before you could seek another one. It’s also important to note that you may not be eligible for Chapter 7 protection if you obtained a discharge in a Chapter 13 case within the past six years.
A bankruptcy attorney may be able to explain the potential benefits of filing for Chapter 13 protection, such as obtaining an automatic stay. The automatic stay prohibits creditors from garnishing wages, filing a lawsuit against you or taking other steps to collect what they are owed. Furthermore, it may be possible to keep a home, car or other assets throughout the duration of your payment plan. Your attorney may talk to you about the various factors that go into structuring this plan.
