Winston-Salem Chapter 7 Bankruptcy Lawyers

Chapter 7 bankruptcy is a form of debt relief designed to give individuals a fresh start by discharging debts.  For those in financial crisis, Chapter 7 bankruptcy is one of several options available.  Bankruptcy is not the right solution for everyone, and it is important to understand the distinctions between the different types of bankruptcy.  Individuals or business owners who are considering bankruptcy should first consult an experienced Winston-Salem Chapter 7 bankruptcy lawyer at Allman Spry Leggett & Crumpler, P.A. to learn about all the available debt relief options.

Understanding Chapter 7 bankruptcy

Some refer to Chapter 7 bankruptcy as straight bankruptcy or liquidation.  In a Winston-Salem Chapter 7 proceeding, the debtor turns over his or her non-exempt property to a trustee, who then sells the property and distributes the money to creditors according to priority rules.  After the Trustee completes his duties under the Bankruptcy Code, then as long as the Debtor is otherwise entitled to a discharge, the court issues an Order Discharging Debtor, which eliminates the Debtor’s personal liability for the remainder of the outstanding unsecured debt.

The Bankruptcy Code provides for certain property to be retained by debtors outside of the reach of their creditors.  Most states have opted out of the federal exemption scheme and have created their own statutory exemption laws.  In North Carolina, many debtors are able to exempt from liquidation their primary residence, professional tools, and government benefits as the state’s statutory exemption laws are sufficient to protect the amount of equity most debtors have in their property.  Therefore, in many cases, there is no non-exempt property for a Trustee to sell, and unsecured debts are discharged without the debtor turning over property to the Trustee.  However, not all debts are dischargeable in a Chapter 7 proceeding.  Student loans, child support or alimony, and recent taxes are examples of non-dischargeable debts under Chapter 7.

Eligibility

Individuals, married couples, partnerships, or corporations may all file Chapter 7 bankruptcy.  However, not everyone is eligible, nor is this the appropriate option for every person in debt.  To be eligible, a debtor must pass a means test.  Generally, those filing for Chapter 7 must have an income below the median for the household size in their applicable state or must have sufficient deductions from income that is above the median income for the household size in their applicable state.

Alternatives to Chapter 7

For those who do not qualify for Chapter 7 or for those who are at risk of losing secured property to foreclosure or repossession, Chapter 13 bankruptcy may be an option.  While Chapter 7 is a liquidation process, Chapter 13 is a reorganization in which debtors formulate a plan to repay creditors over a period of three to five years.  Unlike Chapter 7, Chapter 13 bankruptcy is only available to individuals and sole proprietors.  Individuals who are considering filing for bankruptcy should consult a Winston-Salem Chapter 13 bankruptcy lawyer.

Bankruptcy is a viable option for many, but it is not an appropriate solution to every person’s or entity’s financial difficulties.  A lawyer can explain all of the consequences and benefits of filing for bankruptcy and help those in debt decide whether it is the appropriate solution, based on their individual circumstances.

Contact a Winston-Salem bankruptcy lawyer

We are a Debt Relief Agency under the United States Bankruptcy Laws.  We help clients finding solutions to debt problems, including filing for bankruptcy if that is found to be the most appropriate alternative.  For more information, contact the bankruptcy lawyers at Allman Spry Leggett & Crumpler, P.A.  We serve clients in the Winston-Salem, Greensboro, High Point (Piedmont Triad) area, and throughout North Carolina, South Carolina, the entire Southeast and nationwide.