Pre-Filing Questions

Questions commonly asked about filing a bankruptcy petition and process leading up to filing.

How common is bankruptcy in North Carolina?

In 2010, there were about 25,000 non-business (consumer debt) bankruptcy filings in North Carolina. These filings include both individual cases and joint (husband and wife) cases, so the number of persons filing was somewhat higher than 25,000. North Carolina is home to about 9.5 million people (2010 census). There are about 3.5 million households in North Carolina. This amounts to a bankruptcy rate of about 7 filings per 1000 households, or one filing for every 140 households. On a per capita basis, there were 2.6 filings per 1000 persons.

Why do I need to bring 6 months of pay stubs?

We need six or more months of pay stubs as part of determining your gross income over the last six months. It's also helpful to understand the exact paycheck deductions currently being made. A debtor's 6-month average current monthly income is computed for determining whether a debtor is above median household income, such that statutory means testing applies. If means testing applies, this average income is compared against expense allowances for determining formulaic ability to pay creditors. This ability to pay affects eligibility for chapter 7 and the required payment in chapter 13.

I have filed bankruptcy before, can I file again?

The most important aspect of filing a second bankruptcy is generally whether or not a discharge can be obtained. If no discharge is available due to timing, the bankruptcy will not be successful in eliminating personal liability on debts. The frequency with which a debtor can obtain bankruptcy discharges is limited by statute.

What kind of income source do I need for Chapter 13?

A requirement to be a debtor in a chapter 13 case is having "regular income." Practically speaking, the source and regularity of the income is not as important as existence of the income. Chapter 13 bankruptcy involves a court approved payment plan. In order to obtain approval, a debtor must demonstrate to satisfaction of the court, trustee, and other parties that the plan is feasible, i.e. the debtor will be able to make the payments proposed. Usually, this means the debtor must disclose a source of income that will pay his or her basic living expenses as well as the proposed bankruptcy payment. Most sources of income, if large enough in size, will do.

Can I file bankruptcy secretly?

A common concern is whether friends, family, neighbors, and coworkers will learn of your bankruptcy. While bankruptcy is not a secret process, and cannot be made secret, bankruptcy filings are not widely publicized. In most cases, people who you do not already share your financial information with will not learn about your bankruptcy. Bankruptcy is a very commonplace occurrence, and except in the case of public figures, a personal bankruptcy filing is not a newsworthy event.

Can I file bankruptcy without an attorney?

Yes, as a legal matter, you can file bankruptcy without an attorney. Termed a "pro se filing", many people across the country file without hiring a bankruptcy lawyer, particularly under chapter 7. The primary benefit to filing without an attorney is saving the out of pocket costs of hiring an attorney in chapter 7, or slightly reducing the

What happens if I change my mind about filing bankruptcy?

Sometimes circumstances change and bankruptcy might no longer be a good idea. If you haven't filed yet, you are under no obligation to do so. If you have already filed, which chapter you have filed under becomes critical. Debtors can voluntarily dismiss a chapter 13 bankruptcy at most any time. Since Chapter 13 bankruptcy is based on your future income, whether you commit that income to a bankruptcy plan is voluntary.

Do I need to file with my spouse?

The bankruptcy code provides the option for married couples to file bankruptcy together with a single joint petition. It is only an option, and both spouses do not need to file bankruptcy. Bankruptcy remains an individual choice and option for each spouse.


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