This personal bankruptcy story was posted on the internet in August of 2011 as comments in a bankruptcy discussion: “I am in need of your help. I quit a job ten months ago that paid well, but due to stress levels, it was starting to cause me health issues. I took a job that paid me half of the salary of my last job but we are happy. In the meantime, my motorcycle got repossessed, our house will be repossessed, and creditors are threatening to sue us. We don’t live in our house, but we bought a used mobile home two years ago. We have been trying to sell our old house but have had no luck. Should I or do I need to file bankrupt in North Carolina? I was told that in North Carolina they cannot take our vehicle or house. Is this true?”
So does bankruptcy provide bankruptcy protection in North Carolina? Evidently, this debtor is in the beginning stages of defaults and unsure about whether he should file or not. Keep in mind, certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment may be stopped by filing for bankruptcy.
So how do you know if you are bankruptcy and it is time to file? There are a variety of financial things that can happen that may cause you to go bankrupt. A sudden loss of income, unexpected health problems, an unexpected divorce, a catastrophic event, or an overall poor economy can all play roles in contributing to your bankruptcy.
Generally, you are completely financially bankrupt if your current sustainable income plus any cash reserves will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. Depending on which state you live, the formula should not consider the current value of your assets owned outright including any retirement accounts. Paying debts for five years is chosen because five years is the maximum legal number of years a United States Bankruptcy Court allows an individual to work their way out of bankruptcy protection.
The debtor in the illustration may have been given some bad advice. He indicates his home and automobile are exempt from repossession in North Carolina. That all depends. If the house has a secured loan, the mortgage company can foreclose on the property if he has defaulted on the payments, and the debtor can lose the house, even in North Carolina. The same can be said for the automobile.
The debtor may be referring in his story to not being able to take the house or automobile because of bankruptcy exemptions. In North Carolina, the homestead exemption on real or personal property, including co-op, used as residence is up to $35,000 (husband and wife may double, and $60,000 if 65 or older and spouse is deceased). The automobile exemption is $3,500 as a wild card can be used along with $5000 of the unused homestead exemption.
In any case, to keep the house, all payments must be made up to date or the mortgage company can foreclose even during a bankruptcy.
As you can see from the illustration, bankruptcy laws can be complicated, and it might be wise to consult with a bankruptcy lawyer before you make any bankruptcy decisions.
If you need relief from the stress of debt and you live in or around the metropolitan areas of Charlotte, Gastonia, or Rock Hill, North Carolina, contact us at www.betterbankruptcy.com. We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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