We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

In a bankruptcy case under Chapter 7, you file a bankruptcy petition asking the Court to discharge or wipe out your debts. The basic idea in a Chapter 7 bankruptcy is to wipe out or discharge your debts in exchange for you giving up any “non-exempt” property that you may own. Again, North Carolina law provides that certain property can be kept from your creditors. In most Chapter 7 case, all of the debtor’s property is exempt. However, your situation may differ from that in the typical Chapter 7 case. If you own any “non-exempt” property, the Chapter 7 trustee can sell this property and use the sale proceeds to pay your creditors.

If you wish to keep property that serves as collateral for a secured creditor, such as a mortgage holder, and you have fallen behind in making your regular monthly payments to such creditor, Chapter 7 may not be the best alternative for you. That is because Chapter 7 bankruptcy does not eliminate the right of secured creditors to repossess their collateral if you are behind on your payments when you file your bankruptcy petition with the court. However, a Chapter 7 case will usually discharge or wipe out your personal liability to such creditor if the repossession and sale of the collateral does not satisfy the debt in full.

In a Chapter 13 case, you file a Chapter 13 plan showing how you will pay off some or all of your past-due and current debts over a period of three to five years. The most important thing about a Chapter 13 case is that it will allow you to keep valuable property - especially your home and your car - which might otherwise be lost, if you can afford to make the payments that the bankruptcy laws require you to make to your creditors. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some additional payment to catch up the amount that you have fallen behind. However, in most Chapter 13 cases, the debtors’ Chapter 13 plan payments are dramatically less than the payments that were being demanded by their creditors prior to filing Chapter 13.

A Chapter 13 bankruptcy proceeding will usually be the most beneficial for individuals who own a home, have fallen behind in their mortgage payments, and are in danger of losing their home because of financial problems. In addition, it generally benefits those individuals who are behind on their debt payments and can afford to pay back most or all of their secured debts and at least a portion of their unsecured debts if they are given some additional time to do so. It can also benefit individuals who can afford to pay their creditors from their income over time, but who have valuable property that is not “exempt” and which would be sold by a Chapter 7 trustee. However, Chapter 13 debtors must have enough income to pay for recurring living expenses for necessities (i.e., rent, food, clothing, utilities, insurance, etc.) plus the Chapter 13 plan payments that are required to be made to their creditors by the bankruptcy laws.