North Carolina Bankruptcy

In North Carolina, bankruptcy is the legal procedure through which individuals and entities who cannot pay their debts may seek a fresh financial start. This action stops creditors from pursuing debt collection until the debts are resolved. Because the right to file for bankruptcy is set by federal law, all bankruptcy cases are heard in federal courts.

How to File Bankruptcy in North Carolina

To file for bankruptcy in North Carolina, you must first gather key documents that show your financial situation. These typically include tax returns for the past two years, bank statements from the last 12 months, a recent credit report, pay stubs from the past six months, and any letters from debt collectors. Then, you must attend a credit counseling class approved by bankruptcy administrators in North Carolina within six months before filing.

You or your attorney must select and fill out the appropriate forms for your case and submit them along with the filing fee in the courthouse. Chapter 7 bankruptcy requires a $338 filing fee, whereas Chapter 13 costs $313. However, if you cannot afford the filing fee, you may be eligible for a fee waiver or have the fee waived entirely if your income is below 150% of the federal property guideline.

Once your case is filed, the court assigns you a case number and appoints a trustee that will review your documents and oversee your case. During your 341 creditors’ meeting, the trustee will ask questions about the forms and your financial situation to ensure that you have provided accurate information. Before the court can enter a discharge order, you must also complete a debtor education course within 60 days of the creditors’ meeting and submit the certificate.

North Carolina Bankruptcy Types: Chapter 7, Chapter 13 & Chapter 11

Before filing bankruptcy in North Carolina, you must evaluate your income, debts, assets, and financial goals to determine which chapter best fits your situation:

Chapter 7 (liquidation)

Filing Chapter 7 bankruptcy is the best option if your primary goal is to quickly erase debts. It is designed to eliminate unsecured debts such as medical bills and credit cards within a few months. Nevertheless, your assigned trustee can sell property that are not protected under the state exemption scheme to pay off your creditors.

Chapter 13 (Repayment Plan)

This type of bankruptcy creates a repayment plan that lasts between three to five years. To be eligible, you need a regular source of income and your debts must fall within specific limits. Filing Chapter 13 bankruptcy can help you prevent repossession or foreclosure of essential property.

Chapter 11 (Reorganization)

Through this chapter, you and your bankruptcy lawyer can propose a repayment plan to your creditors while you continue to run your business. Over a five-year period, you can pay a percentage of your debt to the creditor based on the profitability and assets of the business.

Step-by-Step Checklist for North Carolina Filers

These steps are required to file your bankruptcy case in the correct way:

• Gather key financial documents
• Complete a credit counseling class within six months before filing
• Complete and file the appropriate forms
• Pay the filing fee or request for a waiver
• Attend the 341 meeting of creditors
• Complete a debtor education course and submit the certificate to the court.

North Carolina Bankruptcy Court & Record Access

In North Carolina, bankruptcy matters are handled by three U.S. Bankruptcy Courts, each serving a different region of the state.

Eastern District – It handles all bankruptcy cases arising under federal bankruptcy law in counties like Franklin, Bertie, Tyrell, Vance, Lenoir, and Duplin. In addition, this court accepts electronic filing of case documents. The court’s address and phone number are as follows:

Middle District – This court has jurisdiction over bankruptcy matters in Alamance, Caswell, Hoke, Davie, Davidson, and Forsyth. For convenience, it operates from two main locations within the state:

Greensboro Division (main office)

Winston-Salem Division

Western District — This court is responsible for handling bankruptcy cases arising within the Western District of North Carolina. The addresses of the main locations are:

Charlotte Division

Asheville Division

Statesville Division

By registering for a free Public Access to Court Electronic Records (PACER) account, you may view case records online without going to the courthouse. Viewing case information costs $0.10 per page, and downloading a single document costs about $3.

Alternatively, the Voice Case Information System (VCIS) provides details about the debtor, judge, trustee, attorney, and case when a caller dials (866) 222-8029 from a touch-tone phone.