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Gastonia Bankruptcy Law Blog

Keep an eye on your holiday debt, spending

With unemployment at a record low and a decade of lean years in the rear-view mirror, analysts say Americans are likely to spend more on their kids’ Christmas presents this year than in recent history. Correspondingly, that means more debt this year than before, and it’s a trap experts say should make Americans wary.

A recent survey shows that more Americans plan on using credit cards to finance Christmas purchases than last year, Another survey shows that the increased credit card debt will take an average of one month more to pay off, adding more in interest payments to those bills.

How Chapter 13 bankruptcy works

When hearing about a bankruptcy, most people in North Carolina may automatically think about a program via which they may lose precious assets in exchange for being released from debt responsibilities. This is essentially what can happen in a Chapter 7 bankruptcy and is the reason that even the U.S. Courts call this type of bankruptcy a liquidation plan. However, there may well be an alternate type of plan for consumers who need relief from excessive debt but also want to keep their homes or other assets. 

A Chapter 13 plan is often referred to as an individual debt adjustment or even a wage earner's plan. In essence, this form of bankruptcy is a type of organized debt repayment and consolidation program. It allows consumers the ability to restructure their debts and make payments over time while avoiding foreclosure or other loss of assets.

Creditor attempts to foreclose on reality TV star's home

For people in Gastonia who are struggling with debt, a personal bankruptcy might be the best option for them to regain a firm and stable financial status. Yet which form of personal bankruptcy is best? That may only be determined on a case-by-case basis. If one has fallen behind on their mortgage payments, a Chapter 13 bankruptcy may be their best option. Once foreclosure proceedings have been initiated, a Chapter only stays a foreclosure while the case is still active (which is usually only a few months). The lender can then proceed with the foreclosure once the case is over. In a Chapter 13 case, however, mortgage arrears can be included in a payment plan, meaning they will eventually be settled if the debtor continues to make their regular mortgage payments while their case is still open. 

This may be one of the reasons why former reality TV star Paul Teutul Sr. opted to file for Chapter 13 earlier this year. Teutul hopes to keep his New York mansion, yet the bank holding the loan has recently asked permission to proceed with the foreclosure. Its claim is that it would experience irreparable harm if barred from this action, as Teutul not only has defaulted on his mortgage, but also a $15 million loan issued to him earlier. 

Can you stop a foreclosure from happening?

Your pressing financial problems have left you scrambling to figure out a solution to keep your home in North Carolina from going into foreclosure. With deadlines closing in, you are wondering if there are any other options for preventing this situation from happening. Fortunately, there may be alternative options to prevent a foreclosure or at the least, slow the process to allow you time to figure out your next step. 

According to HGTV, your creditor will probably begin to get uneasy if you have missed more than three of your mortgage payments. When this happens, they are legally able to begin the process of taking your home back as it is still under their ownership. Some of the ways you may be able to stop this from happening to you include the following:

  • Bankruptcy: Your home will immediately be protected from foreclosure if you file for bankruptcy protection. If this is the option you choose, there will be repercussions that you will need to manage, but at least you can keep your home and not have to worry about finding another place to live. 
  • Renegotiation of your contract: This option requires you to be on good terms with your lender and willing to show tenacity in reconciling your debts. However, you may be able to renegotiate your original contract to work out a payment method that will allow you to catch up on any missed payments and keep your home. 
  • An assumption of mortgage responsibilities: Another option you may consider is working with your lender to find another buyer who can comfortably assume the financial obligation of paying your mortgage and release you from any debt associated with your home. However, most lenders are hesitant to accept these types of offers as payment problems may be prolonged if the new buyers run into the same problems as you have. 

Are there alternatives to bankruptcy?

Many debtors in North Carolina may be hesitant to file for bankruptcy because they are afraid of losing everything. In reality, the purpose of bankruptcy is to help you make a fresh start and break free of crippling debt.

However, there are pros and cons to filing for bankruptcy. There are strict qualifications to meet and, depending on which chapter of the Bankruptcy Code you file under, you may need to sell off some of your possessions in order to satisfy your financial obligations. According to FindLaw, there are other alternatives available to you to settle your debt.

Qualifying for a Chapter 13 bankruptcy

No one is immune from struggles with debt, so yours should not cause you to feel alienated from others in Gastonia. Oftentimes, if your liability troubles seem to be compounding, personal bankruptcy might be your best option for getting back on top of your financial situation. Yet many have incorrect notions as to their bankruptcy options. This is evidenced by the fact that many come to us here at Sigmon & Henderson, PLLC believing that a Chapter 7 bankruptcy is all that is available to them. Yet to pursue such a case, you have to meet the qualifying criteria. 

If you do not, do not worry; contrary to popular belief, a Chapter 7 bankruptcy is not your only option. You can also seek a Chapter 13 bankruptcy (often call a "wage-earner bankruptcy). The difference between the two is that unlike with a Chapter 7, your debts are not discharged under a Chapter 13 bankruptcy case. Rather, collection efforts against you are ceased while you develop a repayment plan that allows you to settle your debts over a period of three to five years. 

Can bankruptcy give you a fresh start?

To many, filing for bankruptcy can feel like the end of the world. It means admitting, or being forced to admit, that you are financially unable to pay off your debt. However, many do not realize that bankruptcy can act as a fresh start by wiping the slate clean.

This it is not as uncommon as you may think. Many who are overwhelmed by debt look at bankruptcy as a way to rebuild. Chapter 7 and chapter 13 both provide good options for those who qualify. In 2017, over 765,000 individuals filed for bankruptcy.

Debt Traps: What They Are & How You Can Avoid Them

Debt is a lot like weight. 

Phrases such as "simply spend less than you earn" and "eat less than you burn" sound simple enough. However, the obesity epidemic and the staggering number of consumer and business bankruptcies say otherwise. 

Why Is The Face Of Bankruptcy Getting Grayer?

It's quite possible that no generation of Americans has received as much attention as the "Baby Boomers". Each decade continues to bring new milestones for the boomers, along with stories about how the generation's large size is affecting everything from the real estate market to the sustainability of our nation's social insurance programs. 

The most recent headline for this generation isn't a positive one at all: bankruptcy is rising among older Americans

Can my credit recover after bankruptcy?

The word bankruptcy tends to bring an unnecessarily negative connotation. In reality, filing for bankruptcy can be a positive solution to a difficult financial situation for almost anyone to consider. For those thinking about bankruptcy and worrying they’ll forever sacrifice their credit score, there’s some good news you should know.

Filing Chapter 7 or Chapter 13 bankruptcy will by no means spell the end of your healthy credit report. In fact, there are a number of positive financial options for those in North Carolina looking to rebuild credit after a bankruptcy filing.

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Sigmon & Henderson, PLLC
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Gastonia, NC 28054

Phone: 704-269-6374
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