NC Bankruptcy Blog

Hurry or Wait? Motivations for Quick Bankruptcy Filings

The timing of filing a bankruptcy case can be a complex decision. Some facts and legal rules call for moving quickly to file, while other facts and rules favor waiting before filing. Deciding how to balance these competing concerns is one area that the counsel of a knowledgable bankruptcy attorney is of particular benefit. In this two-part post, I describe a few considerations that lead to expediting or delaying a bankruptcy filing. The first part discusses situations where people file bankruptcy quickly.

The Personal Injury Exemption: Protecting Compensation

When a personal injury happens, it is often a major event in a person's life. In addition to physical and emotional impacts of an injury, there are frequently financial consequences. With major injuries, an award of compensation may be designed to at least partially relieve a long-term financial burden. For a person owed money in compensation for an injury, that money may be one of the person's most valuable assets. Fortunately for North Carolina residents filing bankruptcy, North Carolina law provides a generous exemption to protect that compensation.

Bankruptcy as Budgetary Relief

When your expenses are more than you income, the household budget is in an unsustainable position. For most people, eventually one of two things has to change: income increase or expenses decrease. Bankruptcy provides debt relief. This basic concept drives the determination of how helpful filing bankruptcy might be as a tool to bring a budget into shape. Some household budgets are weighed down by debt payments can be balanced or brought closer to balance by debt relief.

Bankruptcy and Second Mortgages: Strip-off and Other Options

In many respects, second mortgages are treated the same as first mortgages in bankruptcy. The most important difference is that an unsecured second mortgage can be stripped off the property, when more debt is owed on the first mortgage than the property is worth.

Consequences of Priority Claim Status

Some debt in bankruptcy is "priority debt." Priority in this context is pure bankruptcy jargon - it is a label applied purely to due definitions and processes in the bankruptcy code. Whose priority are these debts? What is the effect of priority status? Should a debtor care about priority claims? We address these points and more below.

Chapter 7 Discharge & Chapter 13 Discharge - What's the Difference?

Once upon a time, the discharge available to debtors at the conclusion of a chapter 13 bankruptcy plan was known as a "super-discharge" as it ended personal liability on significantly more debts that its counterpart in chapter 7. Today, after the 2005 bankruptcy law (BAPCPA), the chapter 13 discharge isn't so super anymore. Nevertheless, it is not identical to the chapter 7 discharge in scope. This post considers what is dischargeable in chapter 13 bankruptcy, and highlights some notable differences with chapter 7.

Choices When Behind on Mortgage Payments

The house payment is the single largest expense for many families. When finances get tight and bills start adding up, many people get behind on their mortgage payment. In North Carolina, recent statistics put about 3-4% of home mortgage loans at least 90 days past due. In this post, I briefly summarize the major options for a homeowner who is behind on their payments, including bankruptcy approaches.

Overwhelmed by Medical Bills

It does not take a lot before an illness results in sizable medical bills. Often, the more serious the illness, the more serious the bills. Even people with insurance coverage can find themselves with bills from uncovered providers, uninsured procedures, or huge deductible and co-insurance burdens. For the most part, the debt from medical bills is not special for bankruptcy purposes. It is typically an unsecured claim, often paid pennies on the dollar, if at all, and then wiped out by the bankruptcy discharge.

Managing Risk in Bankruptcy

People ask, how much risk is there in filing bankruptcy? Like many things, the answer depends. Bankruptcy is an expansive legal process that carries risk--outcomes can be anticipated but never guaranteed. However, there are choices one can make before and after filing bankruptcy to control exposure to risk. A few kinds of risk merit particular discussion.

Modifying Secured Loans in Chapter 13

A secured loan is any loan where the lender has an interest in collateral they could potentially take to pay the debt, including mortgages, deeds of trust, liens, and car loans. For bankruptcy debtors with secured debt, they can choose to file chapter 7 or chapter 13. Chapter 13 may offer options to adjust the terms on which the secured loan is repaid. Chapter 7 debtors who keep secured property generally pay the secured loan on the same terms as before bankruptcy. In both chapters, turning the property over to the creditor is also an option. This post discusses how and in what circumstances chapter 13 can alter secured loans.


Subscribe to Fabricius & Fabricius Bankruptcy Blog