Contact Information

John G. Rhyne, Attorney at Law
3105-B Nash St., NW
Wilson, NC 27896

Mailing Address
P.O. Box 8327
Wilson, NC 27893 

Phone: (252) 234-9933
Email

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Chapter 7 and Chapter 13 | Bankruptcy Information

A VERY BRIEF OVERVIEW OF BANKRUPTCY 

When a person has debts, he or she may be eligible for a bankruptcy. First and foremost, every case is unique and the proper course of action depends on your particular situation. Bankruptcy is a federal legal proceeding that can relieve a person of some or all of his or her debts. In the right situation, a bankruptcy can provide people with a fresh start. Because every case is different, you should have a consultation with an experienced bankruptcy lawyer so that lawyer can advise you if a bankruptcy is in your best interests.   

BANKRUPTCY CHOICES FOR INDIVIDUALS 

Individuals have choices about what type of bankruptcy they can file. These choices are commonly referred to as Chapters.  Most individuals who file a bankruptcy either file a Chapter 7 case (Straight or Liquidation) or a Chapter 13 case (Wage Earner). Family Farmers may be eligible to file a Chapter 12 case. A very few people will file a Chapter 11 bankruptcy. A Chapter 11 is designed to help businesses reorganize.

Although there was a major change to the bankruptcy laws in 2005, bankruptcy is still an available option for most people. Below is a very basic overview of Chapter 7 and Chapter 13.

CHAPTER 7  

A Chapter 7 bankruptcies is technically called a Liquidation, and is commonly referred to as a straight bankruptcy. A Chapter 7 works best for people

1) who have a lot of unsecured debts such as credit cards, deficiencies, and medical bills;
2) who do not make a lot of money;
3) who do not have a lot of equity or value in their assets; and
4) who are current with their house and car payments if they want to keep the house and/or car. 


The benefits of a Chapter 7 are many:

1) Collection activities of your creditors stop, perhaps permanently
2) You may receive a discharge of your debts.  A discharge is the document from the court that states
you are no longer liable for your debts
3) You may keep all of your assets
4) You are eligible for a discharge within 3 to 4 months of the date of filing your petition 


There are downsides to a Chapter 7:

1) The Bankruptcy Court appoints a Trustee in every case. 
2) Depending on your situation, he may sell some of your assets.
3) If you transferred assets to get them out of your name, the Trustee may get them back from the
person you transferred them to.
4) Some debts may not be discharged (some taxes, child support, alimony, equitable distribution and
student loans are some of the debts that might not be discharged)

Most cases end up as no-asset cases. This means that Debtors keep all assets. And, most debts are discharged. Please note that if you want to keep your house, car, boats, etc., you will have to keep paying your house payment, car payment, or boat payment.

CHAPTER 13

Many people file a Chapter 13 instead of a Chapter 7 case. In a Chapter 13 case, a person proposes a Chapter 13 Plan whereby a person pays a certain amount of money monthly to a Trustee for up to 5 years. The Trustee then pays the money out to the person’s creditors. There are a number of reasons that someone would file a Chapter 13 instead of a Chapter 7. The more common reasons are:

1) The client is behind on mortgage or car payments and needs time to catch up the payments;
2) The client has tax problems and needs help fixing the problems;
3) The client makes too much money and does not qualify for a Chapter 7 case;
4) The client has too many assets and a Chapter 7 trustee may take them; and/or


The benefits of a Chapter 13 are many:
 

1) Collection activities of your creditors stop, perhaps permanently;
2) You may receive a discharge of your debts.  A discharge is the document from the court that states
you are no longer liable for your debts;
3) You may keep all of your assets;
4) You can fix payment problems on car and house loans


YOUR FIRST STEP: Call John G. Rhyne for appointment.  Remember, Bankruptcy is not simple, and talking with an experienced attorney is vital.Bankruptcy might be an option for you, but every person’s situation is unique. A skilled and experienced lawyer can give you the advice, knowledge and guidance that you need to make an informed decision. Contact John G. Rhyne to learn more about your options to protect  your financial well-being.

 

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

 

 

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