As state laws vary, each state has their own laws aim to protect the debtors’ properties from creditors and the bankruptcy trustee when a bankruptcy claim is filed in court. The state of North Carolina also has its own set of laws regarding bankruptcy, and according to state laws, debtors are legally protected for up to US$35,000 worth of equity in their primary place of residence. Marriage can also affect your exemption rate, such as when you and your spouse file a joint bankruptcy claim you can double your exemption equity protection for your home. This is referred as the homestead exemption, but there are a lot more that can offer you protection.

A Congress-passed legislation called the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) provided a bankruptcy means test to see whether you will or will not qualify for a Chapter 7 bankruptcy. This means test is aimed to filter out those who have expendable income to pay for some of their unsecured debts to move to a Chapter 13 bankruptcy rather than have Chapter 7 clear all of their unsecured debts. In the state of North Carolina, the means test will become effective if you earn more than enough for an average-sized family according to your state rules; this will lead to your last 6 months of earnings being run through the test. If you have a significant amount of income left, you might not qualify for a Chapter 7 bankruptcy and you’ll be moved to a Chapter 13. If your leftover disposable income is very little you might qualify for Chapter 7 and you will be automatically qualified if you earn less than the average family (of your size) based on the standards of the state of North Carolina.

Fayetteville bankruptcy attorneys would probably agree that these issues sound intimidating and complicated. This is why it is important to understand the necessary factors to qualify for a Chapter 7 bankruptcy.

Leave a Reply

Your email address will not be published. Required fields are marked *