The Pros and Cons of Chapter 7 Bankruptcy in North Carolina

 Posted on September 07, 2023 in Bankruptcy

 Chapter 7 bankruptcy is a legal option that can help people and businesses in North Carolina struggling with overwhelming debt. Knowing the pros and cons of filing for Chapter 7 bankruptcy is important for any person or business considering using it as a solution to deal with debt-related problems. If you are interested in pursuing Chapter 7 bankruptcy, contact a bankruptcy attorney to help make sure you can make an informed decision about your financial future. 

Pros of Chapter 7 Bankruptcy

1. Debt discharge – One of the primary benefits of Chapter 7 bankruptcy is that it allows eligible people in North Carolina to discharge most of their unsecured debts, such as credit card bills and medical expenses. This means you will not be legally obligated to repay those debts, giving you a fresh start. 

2. Immediate relief – Once you file for Chapter 7 bankruptcy, an automatic stay is implemented. This means all collection actions by creditors will be halted. This means no more harassing phone calls, wage garnishments, or legal actions against you. It provides immediate relief from the stress and pressure of debt. 

3. Speedy process – Chapter 7 bankruptcy is a generally quicker process compared to other bankruptcy options. In most cases, the entire process takes about three to six months, allowing you to move forward with your life sooner.

Cons of Chapter 7 Bankruptcy 

1. Asset liquidation – In Chapter 7 bankruptcy, a trustee may liquidate certain assets to repay creditors. This means you may lose some of your valuable possessions. However, exemptions are available to protect essential items like your home, vehicle, and personal belongings up to a certain value. 

2. Credit score impact – Chapter 7 bankruptcy will have a negative impact on your credit score. It will remain on your credit report for up to ten years, making it harder to obtain credit or loans in the future. However, you can rebuild your credit with time and responsible financial management. 

3. Limited eligibility – Not everyone qualifies for Chapter 7 bankruptcy. To be eligible, you must first compare your income to the median income in North Carolina. If your income is above the threshold, you may be required to file for another form of bankruptcy instead.

Contact a Charlotte Chapter 7 Bankruptcy Attorney 

If you are seeking legal guidance through your Chapter 7 bankruptcy, contact the experienced Mecklenburg County Chapter 7 bankruptcy lawyer with Blossom Law PLLC. Call 704-256-7766 for a free consultation.