Filing for bankruptcy in North Carolina can provide some relief if you are unable to afford the monthly payments to repay your debt. Depending on your financial situation and the kind of debt you possess, bankruptcy may eliminate your debt, and provide you with a fresh start. For consumers in the United States, there are two types of bankruptcy available to debtors: Chapter 7 bankruptcy and Chapter 13 bankruptcy. However, before filing for bankruptcy in North Carolina, discuss your options with an experienced North Carolina bankruptcy attorney. Filing for bankruptcy is not a decision that should be taken lightly, as it will have a lasting impact on your financial situation.

Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the type of bankruptcy that most individuals choose to file. In a Chapter 7 bankruptcy, otherwise known as a straight bankruptcy or liquidation, your non-exempt assets are seized by the Chapter 7 bankruptcy trustee and sold to fund your bankruptcy estate. During the bankruptcy, the funds will be used to repay your creditors in their order of priority, as designated by the Bankruptcy Code. For example, tax debt and administrative expenses due to the bankruptcy will be paid prior to a non-secured debt, like credit card debt.

However, in 2005 Congress made changes to the Bankruptcy Code that impacted eligibility for Chapter 7 bankruptcy. Now, to be eligible to file for Chapter 7 bankruptcy in North Carolina, you must earn less than the median income for the state, or have little disposable income remaining each month after paying your necessary expenses. For example, to be eligible for Chapter 7 bankruptcy, you must earn less than $37,892
for a single individual as of 2011. If you earn more than the median income, you still may be eligible to file for Chapter 7 bankruptcy in North Carolina if you have little disposable income remaining after you pay your necessary expenses each month.

Chapter 13 Bankruptcy
If you are not eligible to file for Chapter 7 bankruptcy in North Carolina, or you would like to keep all of your assets, you should consider filing for Chapter 13 bankruptcy. If you file for Chapter 13 bankruptcy in North Carolina, you will create a repayment plan that details how you will repay your debts over a 3 to 5 year period. The benefit of filing for Chapter 13 bankruptcy in North Carolina is that this type of bankruptcy allows you to keep your assets while being able to catch up on your debts. Throughout the life of the repayment plan you will make a lump sum monthly payment to your Chapter 13 bankruptcy trustee. Your bankruptcy trustee will then disburse the funds to your creditors. However, to be eligible to file for Chapter 13 bankruptcy in North Carolina, you must have regular income for at least 6 months prior to filing for bankruptcy. Regular income is necessary to show the court that you will be able to make your Chapter 13 monthly payments due to the regularity of your income.

If you have additional questions regarding how to file for bankruptcy in North Carolina, you can contact the bankruptcy court in your area. For example, if you live in the Easterm District of North Carolina, visit http://www.nceb.uscourts.gov/. If you will be filing for bankrutpcy without legal assistance, visit http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/FilingBankruptcyWithoutAttorney.aspx for additional information regarding how to file for bankruptcy on your own.