Our mission is to provide exceptional legal advice and assistance in these limited areas:
General Bankruptcy Questions
Most bankruptcy clients are unfamiliar with the complicated federal bankruptcy process. At Craft Law Offices, we strive to explain the procedure, what you can expect, and the benefits you will receive. Our goal is to make your bankruptcy as painless and simple as possible. The following information may help answer some of your initial questions.
Tell your bankruptcy attorney everything. Do not hide anything.
- Discharge (eliminate your obligation to pay) some or all of your debts
- Stop foreclosure on your house, allow you to catch up on payments over time and keep your home without making “double payments”. (It will NOT eliminate a mortgage and let you keep your house “for free”).
- Stop repossession of your vehicle, allow you to catch up payments and possibly reduce your payments. If your car was recently repossessed, bankruptcy can force the creditor to return it to you.
- Stop wage garnishments, harassing phone calls and other collection actions.
- Repay (without penalty) or eliminate tax debts.
- Discharge secured debts on items you wish to keep such as mortgages and car loans.
- Discharge child support, alimony, student loans, some tax debts, court fines, costs and restitution.
- Discharge a co-signor’s responsibility to pay a debt.
- Discharge debts incurred after you file your petition.
The Bankruptcy Code requires ALL property to be listed on the petition. This list is designed to start the tallying process, but think outside this list also. In most circumstances, people get to keep all their property.
- Real Estate– houses, land, commercial property, condominiums, timeshares, life estates, heir property. This includes property in your name and property not in your name that you have an interest in.
- Bank Accounts including checking, savings, CD’s… (even if the balance is $0, even if your name is on an account that is your child’s, parent’s etc…)
- Security Deposits(utility, apartment, etc)
- Household Goods– furniture, electronics, appliances.
- Books, pictures, movies, art, collectibles, records
- Furs & Jewelry
- Sports, Photography, Musical, Hobby Equipment & Firearms
- Insurance Policies
- Education IRA’s
- IRA’s, 401K, Profit Sharing, & Pensions
- Stocks & Business Interests
- Interests in Partnerships or Joint Ventures
- Accounts Receivables
- Alimony or Child Support Owed to You
- Tax Refunds or Other Money Owed to You
- Life Estates, Future Interests, & Equitable Interests
- Interests in the Estate of Decedent or Life Insurance or Trust
- Any Other Claims You Have – Social security Back pay, workman’s comp, class action lawsuits, car accident cases…
- Patents, Copyrights, & Intellectual Property
- Licenses Franchises
- Customer Lists
- Cars, Trucks, Trailers, & Accessories
- Boats, motors, & Accessories
- Aircraft Accessories
- Office equipment & Supplies
- Machinery, Fixtures etc… (used for business purposes)
- Farming Equipment & Implements
- Farm Supplies, Chemicals & Feeds
Before Filing For Bankruptcy
- Credit Counseling with a court-approved agency. This is typically an online program that involves a series of questions and answers. Details regarding this will be given at the consultation.
- Gather the documents required for your attorney and fill out the questionnaire
Exempt property can be kept “for free.” This is property that cannot be claimed by the creditors. North Carolina has exemptions for real estate, cars, income from employment, IRAs, life insurance, and many others. An in-depth analysis of each individual’s circumstances is necessary.
In most cases, yes. If your payments are current, you may decide to continue paying under the current contract. If you are behind, payments may be “caught up” in a chapter 13. If you are “underwater” on a car you have had for more than 910 days, the balance due may be reduced to the current value of the car. You may also choose to give up a car if you owe too much or no longer need or want the vehicle.
In most cases, yes. If you keep your home, you must pay the first mortgage as well as other liens on the property. Past due payments can be caught up in a Chapter 13. Depending on the value of the home, the second mortgage or equity line may be stripped off. Judgments may also be removed.
All exempt property will be owned by you after bankruptcy.
All debtors must attend a “341 Meeting of Creditors.” This is held at various locations (not at the county courthouse). A judge is not present. The bankruptcy trustee assigned to your case will ask several questions and ensure that you have listed ALL of your property and ALL of your debts on the petition. The Chapter 13 trustee also discusses the proposed Chapter 13 plan.
Minor mistakes can be corrected. You will be given a list to help you list all property that you have an interest in. Debts that are omitted by mistake can be added later. However there is an additional fee for amending, so it is important to list all property and debts on the original questionnaire.
Hiding assets from the court is a REALLY BAD idea. Bankruptcy fraud is a federal criminal offense. Trustees have lots of tools to help them find hidden assets. Make every effort to tell your bankruptcy attorney about all your property interests.
In many cases a Chapter 13 discharges a property settlement obligation. However, these are tricky situations and should be discussed with your bankruptcy attorney.
Most of the time filing bankruptcy does not make your credit worse. Usually, people have already missed payments or have been involved in a judgment or foreclosure proceeding before filing, which has already affected their credit.
Your filing may appear on your credit report for 7-10 years. However, it is unknown whether it will “hurt” your credit. You should check your credit report annually for accuracy. Make sure all debts listed on your bankruptcy show a zero balance. If not, you can dispute the entry to get it corrected.
Most people can file again. Sometimes there are extra things that must be done.
You can file together or as an individual depending on which alternative is best. In some cases, it is possible to file only one spouse and protect the credit of the other spouse. This decision depends on whether the debts are in one name or both names and the type of debts.
Credit reports are very helpful. You are entitled to one free credit report each year. Go to www.annualcreditreport.com and request one from each agency. Be careful to use this website and not another one that may pop up. You still need to try to collect as many statements from as many creditors as you can. Credit reports may not list everything you owe.
Yes. Bankruptcy does not always fit a client’s needs. Other alternatives may better serve your needs. Some debts are better served by negotiating settlements, refinancing or in some cases, the best choice may be to do nothing. All options will be explored fully during the consultation.
After Filing For Bankruptcy
If you file a Chapter 13 this is a live seminar provided by the bankruptcy trustee on the same day you have your 341 Meeting of Creditors. It is an excellent program with an informative and entertaining presenter. If you file a Chapter 7, you must complete the course online. The online information will be provided to you at the time your case is filed.
After your petition is filed, a Creditor’s Notice is mailed to your creditors. This notice includes an order directing creditors to stop collection activities. Most creditors comply with this order. If your creditor keeps contacting you, inform the creditor that you have filed bankruptcy and give them your case number. Keep a record of the person’s name, the date and time you provide the info. If this does not resolve the problem, you should contact your attorney. If you have already received your discharge, offer to mail them a copy.
Yes. Frequently during the life of a Chapter 13 plan, a car must be replaced. Sometimes court approval is necessary.
Yes. During a Chapter 13, clients get transferred, receive offers to purchase their home, lose jobs, or cannot afford to stay in their homes for any number of reasons. However, court approval may be necessary, so please contact your attorney.
This is an agreement between you and a creditor where you “re-promise” to pay a debt. This is most often used when you file a Chapter 7 and wish to keep a car and continue to make payments on the car. In North Carolina, this is rarely used for mortgages. We will discuss your options in detail before signing this agreement.
Chapter 7 cases are typically received 4 months after filing. Chapter 13 cases are discharged at the end of the plan period, typically 3-5 years after filing.
Common Bankruptcy Misconceptions
In most cases, you can keep your house. If you are behind on your payments, then Chapter 13 can help you stop foreclosure and catch up on the payments. If you are current on your payments and file a Chapter 7, you keep paying for your house the same way you have been paying. You do not get to keep your house or the excess equity “for free.”
In most cases, you can keep your car. If you are behind on your car payment, then a Chapter 13 can help you stop a repossession and catch up on your payments. If you are current on your payments, you may continue the same payment schedule.
All of your creditors will be listed on your petition but not necessarily treated the same. Secured creditors such as mortgage companies and car lenders must be paid if you intend to keep the house or car. Unsecured creditors like credit card companies may not receive any payments. Each case is different. We will analyze and discuss your situation with you.
Your bankruptcy filing will appear on your credit report for 7 to 10 years. However, this is only one of many factors future lenders will consider. In the future, it will be important how you have paid the trustee, any secured loans you retained, any new credit you have obtained, how much your income is, and many other factors.
Income is one of the many factors we use to determine your bankruptcy options. It cannot prevent filing. It will influence how we file or whether there are other alternatives better suited to your needs.
One spouse may file without the other spouse. In some cases the non-filing spouse benefits, in other cases the non-filing spouse is not impacted at all. These are individual circumstances that we will discuss.
Bankruptcy court is part of the Federal Court system, not the state court system. Typically bankruptcy cases are not published in the newspaper like state court lawsuits or foreclosures.