When Should I Think About Filing For Bankruptcy?
- If circumstances have reduced your income so that you cannot pay for the basics (rent, mortgage, food, transportation) and still have money to make payments on your other debt, you will need the help of a bankruptcy discharge.
- If your income is enough to pay for the basics and you are still able to make the minimum payments on your other debt, BUT THE AMOUNT OF THAT DEBT IS NOT GOING DOWN, then you should seriously consider the help of a bankruptcy discharge.
- If you are being threatened with home foreclosure or car repossession, you may need the help of the automatic stay which occurs when you file a bankruptcy case.
The best thing you can do if you are experiencing one of these warning signals is to consult an experienced bankruptcy attorney. Doug Wickham can help you determine whether bankruptcy is the right way for you to obtain relief from your debts.
How Will Filing Bankruptcy Help Me?
- Filing a bankruptcy case imposes an automatic stay which stops all harassing contact from creditors. No more phone calls and nasty letters.
- This automatic stay also stops all creditor action to seize property or collect debts. Home foreclosure is stopped. Your vehicle cannot be repossessed during your case unless the creditor comes before the bankruptcy court and obtains permission.
- The discharge in bankruptcy permanently eliminates most debts. Divorce obligations, student loans, and recent tax debts are the primary exceptions. However, changes in the administration of student loans have made some student loans more easily dischargeable. Contact attorney Douglas Wickham to see if your student loans can now be discharged in bankruptcy.
In order to know more specifically how filing a bankruptcy case might help you, consult an experienced bankruptcy attorney. Doug Wickham can help you understand in more detail how a bankruptcy case can help you.
Will I Lose My Property? What Can I Keep If I File Bankruptcy?
When you file bankruptcy, everything you own technically becomes property of the bankruptcy estate. HOWEVER, THERE IS AN ARRAY OF EXEMPTIONS THAT ALLOW YOU TO KEEP ALL, OR AT LEAST MOST, OF WHAT YOU OWN. If you have lived in North Carolina for at least two years before you file your case, you can keep the property listed below. If you have moved to North Carolina in the last two years, Doug Wickham can help you determine how much property you can exempt and keep. Contact him from this site or call him at 919-239-0488.
The most important NC exemptions are:
- Home (Residence): Up to $35,000 equity in your residence. A husband and wife filing together may exempt up to $70,000 equity in their residence if they own the property together. “Equity” is the value of the property less all debts or liens secured by it.
- Motor vehicle: Up to $3,500 equity in one motor vehicle.
- Household goods: Up to $5,000 for yourself (and $5,000 for your spouse if you file jointly) plus $1,000 for each dependent (up to 4) in items such as household furniture, clothes, jewelry, etc. VALUE IS WHAT YOU COULD SELL THEM FOR, NOT WHAT IT WOULD COST TO REPLACE THEM. In almost every case, this exemption will protect whatever you may have in your household.
- Retirement benefits: No dollar limits here! IRA accounts and North Carolina retirement benefits for teachers, state employees, local government employees, and federal civil service benefits are fully exempt. Your interest in any ERISA-qualified retirement plan (401(k) account, pension or profit-sharing plan) is also protected in bankruptcy. IF YOU ARE DRAWING FROM A RETIREMENT ACCOUNT TO PAY YOUR DEBTS, YOU ARE LOSING A VALUABLE ASSET THAT YOU CAN KEEP IF YOU FILE FOR BANKRUPTCY.
- Life insurance (cash value): Cash surrender value in any life insurance policy insuring the life of the debtor in which the spouse and/or children are named beneficiaries is totally exempt.
- Wages: Wages earned within 60 days of filing for bankruptcy which are necessary for the support of you or your family are exempt. This is so even if they have been deposited into your bank account.
- Tools of trade: Up to $2000 worth of equity in your tools of trade. This is in addition to the exemption for ordinary household goods.
- Wild card: There is a “wild card” available to exempt any property not already protected by one of the other specific exemptions. The amount of the wild card is set at up to $5,000 of unused residence exemption. This exemption is most helpful if you have more than $3500 equity in a motor vehicle, money in the bank, tax refunds not yet received, or cash on hand.
- Tenancy by the entirety: There is a special exemption in any real property (not just a residence) owned by a husband and wife together as tenants by the entirety. The amount of exempt equity is unlimited, but the equity is protected only if the husband’s and wife’s creditors are individual and not joint. If you own real estate jointly with a spouse with a large amount of equity it will be crucial to know what other joint debts you have with your spouse.
- Others: Health aids, compensation for injuries, alimony and child support, and federal government benefits are also specifically exempt from creditors and are therefore exempt in bankruptcy.
How Can I Begin The Process?
You can discuss your situation with an experienced and caring bankruptcy attorney by contacting Wickham Law through this site or by calling Doug Wickham at 919-239-0488. Initial consultations are free. An initial phone call can usually clarify whether you should move forward. You should have enough information so that attorney Wickham can understand what you own, what you owe, and what your income situation is. Once he understands the specifics of your situation, he can recommend the best course of action for you. If you decide to file a case, it can be prepared and completed with minimal office contact.
Things that you might bring to your initial consultation:
- Recent pay stubs and other sources of income info
- A list of what your debts are, including the amount owed, monthly payment and how far behind
- A list of what you own
- Any court or foreclosure papers that have been served on you