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Durham Residents: Do You Qualify for Chapter 7 Bankruptcy?

You’re dealing with debt, looked up your options, and found Chapter 7 bankruptcy. It seems like it might help you wipe out what you owe and get a fresh start, but now you’re wondering how you can qualify for Chapter 7 bankruptcy in North Carolina. In North Carolina, you have to meet certain rules in order to qualify for Chapter 7. If you do qualify, most of your unsecured debt, like credit cards, medical bills, and personal loans, can be wiped out.

In 2016, more than half of all bankruptcy cases were Chapter 7, and over 95% of those people had their debts wiped out. That’s why Chapter 7 is the fastest, simplest, and most common type of bankruptcy in Greensboro and across North Carolina. But not everyone will qualify. To find out if you meet the requirements for a North Carolina Chapter 7 bankruptcy, talk with an experienced Durham County bankruptcy lawyer at the Law Office of Stephen E. Robertson.

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How Do I Qualify for Chapter 7 in Durham County?

Filing for Chapter 7 bankruptcy in Durham County is a big decision and not something to rush into. You should talk with a licensed Durham County bankruptcy lawyer first to understand your options. Factors that can help you figure out whether you might qualify for Chapter 7 include:

  • Your income is below your state’s median.
  • You have little or no extra money each month.
  • Your debts are more than half of what you make in a year.
  • Your debt is affecting your daily life.
  • It would take five years or longer to pay off what you owe.

If one or more of these signs describes your situation, you may be a good candidate for Chapter 7 bankruptcy under North Carolina law.

To have your debt wiped out through a Chapter 7 filing in Durham County, you must meet the following requirements:

Your Annual Income Is At or Below the Threshold

In North Carolina, you must make less than the state’s median income to qualify. For example, in Greensboro, a two-person household can’t make more than $50,700. A three-person household can make up to $55,000, and a four-person household can make up to $63,700. If you earn more than these amounts, you are not automatically ruled out; you can still take the means test to see if you qualify.

Bankruptcy Means Test

The means test in North Carolina is a way to check if you qualify for Chapter 7 bankruptcy. It looks at your income and expenses to see whether you have enough money to pay back some of your debt. If you do, you might be a better fit for a Greensboro Chapter 13 bankruptcy instead. The test compares what you earn to what other people in your state make and then subtracts your allowed expenses.

Overall, the means test looks at your secured and unsecured debts, your income, your expenses, and your basic cost of living in Durham County. Its goal is to see whether you can afford to pay back some of your debt through Chapter 13 or if you need the full debt wipeout that Chapter 7 provides.

Not Overextending the Limits on Previous Bankruptcies

You can only file Chapter 7 once every eight years if your last case was fully discharged. You also cannot file Chapter 7 in Durham County if you completed a Chapter 13 case within the last six years. If you filed a Chapter 7 or Chapter 13 in North Carolina that did not go all the way to discharge, you may still qualify, but you might need to wait longer than 180 days.

If you were accused of abuse or fraud in a previous bankruptcy case, you may not be allowed to file again. This can include breaking a court order, not finishing your required credit counseling, or having a past Greensboro bankruptcy case ruled as fraudulent. Talk with a Durham County bankruptcy lawyer at the Law Office of Stephen E. Robertson about any past filings so they can confirm whether you qualify for a new case.

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File a Petition

If you meet the rules under North Carolina bankruptcy law, you must file a petition with the local bankruptcy court in Greensboro. You also have to submit a financial statement that lists your assets, debts, income, expenses, and your overall financial situation, along with any contracts or leases in your name.

Mandatory Credit Counseling

Everyone filing for bankruptcy must complete credit counseling first. There is a fee, and you can usually do it online or by phone. You have to take the course from an approved provider in the Greensboro district. In North Carolina, you cannot file your bankruptcy case until you finish this step.

Call The Law Office of Stephen E. Robertson

If you are having trouble with unsecured debts, your first step should be talking with an experienced Greensboro bankruptcy attorney. At the Law Office of Stephen E. Robertson, our Durham County bankruptcy lawyers understand North Carolina bankruptcy laws and can help you work toward the best possible outcome with as little harm as possible.

Qualifying for Chapter 7 bankruptcy requires a lot of paperwork, and the process can be long and complicated. If you need help with debt or want to know if you qualify for Chapter 7, call the Law Office of Stephen E. Robertson at (336) 370-6760 or fill out our online form to schedule your consultation.