Bankruptcy Attorney Handles Chapter 7 and Chapter 13 in Greensboro, NC
Providing advice about debts in the High Point area
Many North Carolinians are confused by the type of debt they hold and ask the difference between secured and unsecured debts. At Blalock Law Offices, P.A., I am happy to answer bankruptcy and bankruptcy-related questions for my clients in the Greensboro, Asheboro, Burlington and High Point areas of North Carolina. The difference between secured and unsecured debts is straightforward. A secured debt is guaranteed by some piece of property. If you fail to pay your secured loan, the creditor can repossess the property. Perhaps the most common example is a home mortgage in which the house itself serves as collateral to secure the loan. On the other hand, unsecured debts, like credit card debts, are not backed by any property. Finally, the bankruptcy code also defines “priority debts,” which are debts that the bankruptcy code assigns a certain priority for payment.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is also known as liquidation and can be used by both individuals and small businesses. Under Chapter 7, a bankruptcy trustee locates and sells nonexempt assets. The proceeds of the sale are used to satisfy creditors. Following the distribution of all proceeds to creditors, the court discharges or eliminates your dischargeable debt. In most Chapter 7 cases, all property can be exempted. So no property will be liquidated by the bankruptcy trustee. However, Chapter 7 is not without its risks. To start, you must be able to pass a means test to qualify for Chapter 7. Additionally, it does not provide for payment of secured debts and offers no protection to loan co-signers.
What is Chapter 13 bankruptcy
Chapter 13 bankruptcies versus Chapter 7 bankruptcy can be summed up as taking longer to obtain a discharge and requiring a payment plan. However, despite these seeming disadvantages, Chapter 13 bankruptcy can be more beneficial than Chapter 7. To begin with, Chapter 13 may be your only bankruptcy option if you cannot pass the means test. Chapter 13 also handles secured debt better than Chapter 7 because it allows you to “cram down” or reduce a secured loan to the value of the collateral. Additionally, Chapter 13 can stop a home foreclosure and provide a proposal to catch up on your mortgage through the Chapter 13 plan, whereas under Chapter 7, the home may be lost.
Contact us today for bankruptcy guidance in Burlington & surrounding areas
Bankruptcy and its numerous related concerns can be confusing for many. At Blalock Law Offices, P.A., I give you the personal attention you deserve and answer all your questions thoroughly. Please contact us today by phone at 336-609-6878 or online today.