At Craft Law, we know how confusing it can be to file bankruptcy. We strive to make filing bankruptcy as easy and stress-free as possible. Our offices, located in Greenville, Morehead City, and Rocky Mount, North Carolina, are here to help with all your bankruptcy needs. We also specialize in traffic law and underage drinking citations.
One common question that many people have about bankruptcy is which type of bankruptcy to file. Chapter 7 bankruptcy is a very common chapter of the Bankruptcy Code, which calls for liquidation, which is the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.
A chapter 7 bankruptcy is different from chapter 13 bankruptcy, another commonly filed chapter. One way that these chapters are different is that chapter 7 does not involve filing a plan of repayment, as is required in a chapter 13 bankruptcy. The bankruptcy trustee sells the debtor’s nonexempt assets and then uses the proceeds from those assets to pay creditors. The Bankruptcy Code will also allow the debtor to keep some property that is considered exempt. However, a trustee will then liquidate the rest of the debtor’s assets. This means that potential debtors should understand that filing under chapter 7 may result in the loss of some property.
To begin a chapter 7 case, a debtor should file a petition with the bankruptcy court serving the area where the debtor lives or owns a business or other assets. The debtor must also file four main things: schedules of assets and liabilities, a schedule of current income and expenses, a statement of finances, and a schedule of executory contracts and unexpired leases.
In addition, a debtor must provide the assigned case trustee with a copy of the tax return for the most recent tax year, along with tax returns filed during the case. There may be additional documents that need to be filed depending on each case.
Filing for bankruptcy might be the best decision for you. At Craft Law, we aim to make this process as easy on you as we can. Serving Greenville, Rocky Mount, and Morehead City, North Carolina, we are proud to take care of your bankruptcy needs. Give us a call today!