By North Carolina Bankruptcy Attorneys

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INFORMATION ON BANKRUPTCY IN GENERAL

Bankruptcy is a legal tool available to people to relieve themselves of their debts and start fresh. There are two chapters of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7  is appropriate for debtors with low income who are seeking to relieve themselves of most if not all of their obligations. Chapter 13 is appropriate  for debtors with higher income and establishes a payment plan schedule to pay off certain priority creditors over a three to five year span. Determining which chapter of bankruptcy would work best for your situation,  depends on your gross income, assets, expenses, and the amount and type of debt. You can discuss this further and any other questions you may have with the Bankruptcy Attorney, during your meeting.

DOCUMENTS  NEEDED TO FILE BANKRUPTCY

These are the type of documents your bankruptcy attorney will likely to ask for:

• A fully answered short Questionnaire
• Paystubs
• Tax Returns for the past two (2) years
• Bank Statements
• Listing of your assets
• Number of your dependents
• Social Security # (Spouse) so that your credit file can be reviewed
• Tax Notices
• Judgments (Lawsuits)

341 MEETING

The 341 Meeting of Creditors is like attending bankruptcy court. This takes place a month after your bankruptcy petition is petition has been filed. The Bankruptcy Trustee, your Attorney, you meet and review your petition to insure that you read, approved, and signed your petition before it was filed. The trustee may also ask you some questions regarding your income and expenses. It is a brief meeting that takes no longer than five to ten minutes. For more information on this meeting see our page on 341 Meeting of Creditors.

MEETING WITH THE ATTORNEY

We offer several options for you to discuss your debts and financial situation. You can meet with the Bankruptcy Attorney in one of the two offices available. You may also discuss your options via a telephone consultation. In addition, may schedule your meeting online (in person or telephone) or call 704-461-1883.

BANKRUPTCY FEES

We understand that your financial situation is a little rocky and we will do the best to work within your budget. Our bankruptcy fees are reasonable and affordable, we also offer payment plans.

AFTER FILING FOR BANKRUPTCY 

The purpose of filing for bankruptcy is to start fresh and become debt free. Naturally after bankruptcy you will you need to take the appropriate steps to rebuild your credit. Filing for bankruptcy maybe the only way you can erase your negative history so that you move toward financial freedom and success.  You can discuss your options and what steps are necessary with our Bankruptcy Attorney.

Maxwell Law Firm, PLLC is located in Concord, North Carolina, and represents clients throughout the communities of Cabarrus –Concord, Kannapolis, Harrisburg, Mt. Pleasant; Davidson-Lexington, Thomasville, Welcome, Denton; Stanly-Albemarle, Locust, Norwood, Oakboro, Badin, Stanfield, Richfield, New London; Rowan- Salisbury, China Grove, Spencer, Landis, Enochville, Granite Quarry, Rockwell, East Spencer, Cleveland, Faith; Scotland-Laurinburg, Wagram, Gibson, East Laurinburg; Richmond– Rockingham, Hamlet, East Rockingham, Ellerbe, Dobbins Heights, Hoffman, Norman; Southern Pines, Pinehurst, Aberdeen, Seven Lakes, Whispering Pines, Carthage, Robbins, Pinebluff, Taylortown, Vass., Montgomery – Troy, Biscoe, Mount Gilead, Candor, Star., Hoke – Raeford, Rockfish, Silver City, Ashley Heights, Five Points, Bowmore, Dundarrach, Surry – Mt Airy, Elkin, Toast, Flat Rock, Dobson, Pilot Mountain, White Plains, Stokes –King, Walnut Cove, Danburry.

Sometimes the issue comes up where spouses are already separated and have joint debts are looking to file for bankruptcy before filing for divorce. The question always comes up if they should file jointly or individually. A separation agreement may spell out who pay what debts, but creditors are not bound by that agreement. They can come after both spouses on a joint debt.

INCOME AND EXPENSES

If your goal is to completely rid yourself of debt as soon as possible than filing chapter 7 will achieve that goal in the matter of a few months. Chapter 13 can take anywhere from three to five years. Income and expenses determine which chapter of bankruptcy you qualify for. If your combined income is too high chapter 7 than you may to file a joint chapter 13. However, if you can individually qualify for a chapter 7 it may be more advantageous to file bankruptcy separately.

ARE YOUR DEBTS INDIVIDUAL OR JOINT

Property that is held as tenants by the entirety (married couple) or as joint tenancy is exempt under 11 U.S.C. § 522 (b)(3)(B) from the debts of an individual tenant. What this basically means is that your individual creditors can not attack property. The exemption will not apply if you have joint debts. Filing separately in a situation where there are joint debts would effectively release you from the issue or problem.

IS THERE ANY JOINT MARITAL PROPERTY AT STAKE

What is really your intent with the property secured by a loan? If your goal is to return the collateral and move on than Chapter 7 maybe the best option for you, whether you file individually or jointly. Even if your goal is to keep the property it maybe easier to file separately that way the spouse planning to keep the property can always affirm that particular debt.

You should consult with a Bankruptcy Attorney in your area to see how your particular situation should be handled.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100.  Save an additional 25% off the fees by scheduling your appointment online.

Disclaimer: This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

Clients always ask me what to expect when they have 341 meeting and I normally give them a run down.

WHAT IS 341 MEETING

Around six weeks, after you file for bankruptcy typically a court date will be scheduled this is called the 341 “Meeting of the Creditors.” The meeting takes anywhere from five to fifteen minutes. The purpose is for your to testify that you have disclosed your assets, debts, and any pertinent information on your bankruptcy petition.

QUESTIONS THE TRUSTEE TYPICALLY ASKS DURING THE 341

Trustee may ask include:

• Your name, address and social security number;
• Whether your bankruptcy petition and schedules are correct;
• How you valued property listed in your petition; AND
• Whether there have been changes in your situation since your filing date.

DO YOU NEED TO ATTEND

Yes you have to absolutely attend. Your Attorney and the Trustee will be present.  Creditors may also attend the 341 to ask both the client/debtor and the trustee questions regarding the case. Normally, creditors do not attend unless they plan on objecting to something regarding the debt you owe to them and or your asset disclosure. You should discuss this with your Bankruptcy Attorney  before the 341 meeting.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100.  Save an additional 25% off the fees by scheduling your appointment online at http://maxwelllegal.com/consultations.

Some credit cards may offer introductory rates as low as 0 percent for a limited amount of time. These introductory rates are temporary. This means that once it is over, the your interest rate will spike up to anywhere from ten (10) to twenty (21) percent on average.

MINIMUM PAYMENTS

Generally, the minimum monthly payment required on these accounts can be anywhere from 2-5% of the balance on the card, in addition to any annual fees. If your rate of interest is more than 10%, then your minimum payment is not even covering the interest your account is accruing.

Credit Card Companies are now required to disclose consumers on their statements how long it will take them to pay off their cards if they continue to make only the minimum payment on their accounts. The credit company does not disclose the total amount of interest you will end up paying overtime.

WHY INTEREST IS NOT A GOOD THING

Is income you are generating for the credit card company. It is money you can not save, that will not go into your retirement account, or toward a vacation. Credit Card companies will often entice you with perks, gifts, and points for items. You can earn these points and redeem them for items and trips. The only problem with this program is that you will need to spend over $10,000 a year to be able to receive a free plane ticket. The interest you will pay on $10,000 in debt is far more than what you would have paid if you bought the plane ticket outright.

YOU HAVE HIGH CREDIT CARD BALANCES THAT HAVE HIGH INTEREST RATES

High credit card balances harm your credit score. In turn when you go to apply for new credit, the terms of which will be less favorable for someone with a lower score and or high credit card balances. It becomes a cycle of debt that spins out of control as you try to pay off cards, whose balances continue to rise although you are making monthly payments.

WHAT ARE YOUR OPTIONS

1. If you have income and are not behind on your bills, then you can create a financial plan to pay off your consumer debt within 1-2 years.

2. If your debt can not be paid off within 2 years, then you may want to consider Bankruptcy. It is a federal right that you have to absolve yourself of certain debts and get a fresh start. Consult with a Bankruptcy Attorney in your area for more information on Bankruptcy and which chapter would best suit you. There are two chapters of consumer bankruptcy : Chapter 7 and Chapter 13.

You are making the credit companies richer by allowing them to charge you interest at an alarming rate. The sooner you would through or rid yourself of debt, is the sooner you can start living your life.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100.  Save an additional 25% off the fees by scheduling your appointment online at http://maxwelllegal.com/consultations.

I am often asked by clients why a credit counseling certificate is required before filing and a financial management course after filing for bankruptcy and I often have to explain the basis of this requirement to my clients; says Charlotte Bankruptcy Attorney   Victorianne C. Maxwell.

As part of the 2005 Amendments to the Bankruptcy Code, people who plan to file for bankruptcy protection must get credit counseling from a government-approved organization within 180 days (6 months) before they file. They also must complete a debtor education course to have their debts discharged.

Purpose of the pre-filing Bankruptcy Course

This course should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online. The counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the counseling organization before the session begins.

Post-Filing Bankruptcy Course

Similarly this course will include information on developing a budget, managing money, using credit wisely, and other resources. Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling – about two hours – and the typical fee is between $50 and $100. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider.

Once you have decided that you will file for bankruptcy contact your Bankruptcy Attorney or the Bankruptcy court for a list of approved credit counseling agencies in your district. The Western District of North Carolina our list is available online here.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100.  Save an additional 25% off the fees by scheduling your appointment online at http://maxwelllegal.com/consultations.

Many times clients tell me that they would like to keep some property that a credit has a security interest in, such as a car loan and they ask whether they have to sign additional paperwork after filing for bankruptcy.

WHAT IS A REAFFIRMATION AGREEMENT

A reaffirmation agreement for a debtor to bound by the initial terms of the finance contract absolving them of the protection provided by filing for bankruptcy.

PURPOSE OF A REAFFIRMATION AGREEMENT

When you file for chapter 7 bankruptcy   you can elect to keep property secured by debt by repaying the debt or surrender it to the lender without further liability. The reaffirmation legally binds the debtor into the initial terms of the original financing contract and gives the lender the same rights they had before bankruptcy, such as repossession and suing if a debtor defaults on the loan.

SHOULD YOU SIGN A REAFFIRMATION AGREEMENT

I do not recommend that my clients sign reaffirmation agreements. The creditor can only retrieve the property in a chapter 7 if you are not current on your payments. If you do not sign the reaffirmation agreement and later decide to return the property, well after your discharge, you can do so without further penalty. By Signing the reaffirmation agreement you are essentially loosing the protection you sought in bankruptcy.  Reaffirmation agreements are completely voluntary and a creditor can not threaten to take the property if you fail to sign one.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100 or save 25% off the fees and schedule online at http://maxwelllegal.com/consultations

I am frequently asked what judgments are? how they work? how someone can repair their credit and save their assets if they receive one, says Charlotte Bankruptcy Attorney Victorianne Maxwell of Maxwell Law Firm, PLLC.

WHAT IS A JUDGMENT ?

A judgment is a lien on a debtor’s property that is granted to a creditor by court judgment.

HOW DOES A JUDGMENT COME ABOUT?

If you fail to pay a debt owed, then you have defaulted on a debt. A creditor can file a lawsuit on the debt and will receive a judgment if they can prove there is a valid debt and the amount owed. If you fail to file a response to the lawsuit then the credit will receive what’s called a default judgment. Even if you respond, if the creditor can still prove the debt is owed they will be able to make a motion for summary judgment and receive a judgment that way.

WHAT IF I HAVE RECEIVED A JUDGMENT IN ANOTHER STATE?

A judgment in another state can be enforced in North Carolina, if it is properly domesticated. What this means is that the out of judgment must be filed in North Carolina and the appropriate paperwork showing the source and validation of the debt must be attached. Once this is done a hearing will be held in North Carolina to formally file the judgment in North Carolina with a new case number. Unless the creditor properly domesticates their judgment they will not be able to enforce in North Carolina.

WHAT ARE SOME OF THE CONSEQUENCES OF HAVING A JUDGMENT ENTERED AGAINST ME IN NORTH CAROLINA?

Several things can occur once a judgment is entered. A Lien may be enforced by having the sheriff seize the property and hold a sheriff’s sale. A lien can also be placed against any real property the debtor owns. If a lien is placed on real property than you will have to satisfy the judgment before the property can be sold or transferred.

IS THERE ANY WAY TO HAVE A JUDGMENT VOIDED?

In some limited cases you can file a motion to have the judgment set aside for reasonable cause. For example, if you were not served properly and did not discover the judgment within reasonable time. The best thing to do is to hire an Attorney from onset to see if any legal defenses exist before the judgment in entered. An Attorney can attack the validity of the debt and or the untimely filing of a judgment.

HOW DOES A JUDGMENT EFFECT MY CREDIT?

Judgments are valid for ten (10) years in North Carolina and can be renewed for an additional ten years, upon expiration. A judgment is a very derogatory and negative item on your credit and will definitely lower your credit score.

REPAIRING MY CREDIT AFTER JUDGMENT?

There are several ways to repair your credit after you have received a judgment.

1. Satisfy the judgment. Keep in mind that satisfying the judgment will be considered to be new activity on that account and that change will remain on your credit report for another seven years.

2. Dispute the item if you feel that it was improperly recorded or placed on your credit.

3. File for Bankruptcy. It makes sense to take this option if you qualify for bankruptcy, and or you have other debts you would like to discharged. In either Chapter 7 or Chapter 13 Bankruptcy something called a Motion to avoid a lien can filed to void the judgment and have it discharged, Consult with a Bankruptcy Attorney in your are for more information.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-461-1883 or save 25% off the fees and schedule online at http://maxwelllegal.com/consultations.

Chapter 7 bankruptcy

These services are provided by a licensed North Carolina Attorney NOT a paralegal or Tax company with unlicensed professionals

We provide the following:

1. File or amend current and previous federal and state returns (free-e-filing)
2. Check our webpage for our low Chapter 7 Bankruptcy Fees see http://maxwelllegal.com/bankruptcy_advertisment.pdf
3. Tax Settlements with the IRS / NC DOR
4. Foreclosure assistance
4. Tax relief and assistance for federal and state taxes
5. modification assistance

Two convenient offices:

Charlotte & Concord

Maxwell Law Firm, PLLC
Call 704-461-1883

SAVE AN ADDITIONAL 25% OFF THE FEES BY SCHEDULING YOUR APPOINTMENT ONLINE

One of the factors that helps to determine whether someone qualifies for bankruptcy is the means test factor. The means test measures one’s ability to pay  future debts is measured by their average monthly gross income over the past six (6) months.

Sources of Income include:

• Earnings from wages
• Alimony
• Income for rental property
• Unemployment Wages
• Disbursements Pension, IRA, 401Ks (Cash-ins)
• Funds received from Trusts
• Interest
• Disability Payments
• Income Tax Refunds
• Bonus Payments
• Social Security Benefits

Amounts received from a loan disbursement such as a student loan, private loans, retirement loans, or any other type of loan are not considered to be income. Generally,  borrowed money is not income.  The reasoning behind this is that If you borrow money from a student loan agency and do not receive a 1099 or W2 at the end of the year and you do not have to include that money in your taxable income.

As for grants and scholarships it depends on the nature of the scholarship. A scholarship amount you use to pay any expense that does not qualify is taxable, even if the expense is a fee that you must pay to the institution as a condition of enrollment or attendance. However, prizes and amounts paid for services (fellowships) are taxable so they would be income for purposes of bankruptcy. [See IRS publication 970 ]

If you are considering bankruptcy, you should consult with a duly licensed Bankruptcy Attorney in you area to discuss whether you qualify and your options.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, chapter 7 bankruptcy, foreclosure defense, chapter 13 bankruptcy representation, and loan modifications. We have two offices in North Carolina one in Concord and in Charlotte. You may schedule your appointment by calling 704-461-1883 or save 25% off the fees and schedule online at http://maxwelllegal.com/consultations