Chapter 7 Bankruptcy Laws in North Carolina
- The federal Chapter 7 bankruptcy process allows eligible North Carolina residents to legally liquidate almost all of their debts, though some exceptions apply, according to the book "How to File for Chapter 7 Bankruptcy." People considering filing Chapter 7 in North Carolina should keep in mind that qualifying for this type of debt relief requires all their assets, such as real estate and savings accounts, to be turned over to a trustee for sale.
- If you earn more than the North Carolina's median income, you might need to repay some of your debts under court supervision in Chapter 13 bankruptcy instead of liquidating obligations through Chapter 7, according to the book "How to File for Chapter 7 Bankruptcy." As of 2010, a single North Carolina resident could earn up to $38,794 and still qualify for Chapter 7 bankruptcy, according to the U.S. Trustee Program website. A two-person family could earn as much as $52,194 to qualify, and the median income for families of four as of 2010 was $67,295. If your income is higher than the applicable median figure, you must demonstrate through a federal means test that you have no disposable cash.
Credit Counseling Requirement
- Unless you can prove a serious hardship that justifies a federal waiver, you must complete credit counseling before filing Chapter 7, according to the United States Bankruptcy Court Eastern District of North Carolina. You cannot file your paperwork without providing evidence of a completion certificate, and this applies even if a lawyer files your papers on your behalf. The Federal Trade Commission notes that such counseling sessions must be completed no more than 180 days before a bankruptcy filing, and usually last about 60 to 90 minutes in person, online or on the telephone.
- Chapter 7 bankruptcy does not rid you of your obligation to pay child support, alimony, court fines or civil damages awarded to another person due to your illegal acts, according to the United States Bankruptcy Court Eastern District of North Carolina. Also, if you don't note a debt in your Chapter 7 petition you might not be able to add it later. In most cases, you cannot liquidate federal student loans in Chapter 7. However, those North Carolina residents with a provable permanent disability that seriously hampers their chances of repaying the commitment might receive a hardship discharge of such debts, according to the book "How to File for Chapter 7 Bankruptcy." Tax debts can be eliminated in a North Carolina Chapter 7 case only if they are at least 3 years old. You must pay all newer state, local and federal taxes.