Westall, Gray & Connolly, P.A. | firstname.lastname@example.org | 828-254-6315
David Gray is a North Carolina Bar board certified specialist in Bankruptcy Law. He has been representing clients in bankruptcy proceedings in Western North Carolina for over 40 years. He works with another attorney (his daughter), Natalie Gray, to help individuals and businesses navigate through financial distress.
David and Natalie think that the motto “knowledge is power” is particularly applicable when it comes to understanding your options for dealing with debt. That is why all initial consultations are free.
During this consultation, we take the time to understand your specific situation and review your options. This is important because there are many misconceptions about your rights when dealing with creditors. If you are in financial trouble – or think you may be heading that way – setting up a risk free consultation will allow you to face these difficult financial times with the confidence of knowing your options and your rights.
Unlike some other firms, each and every client will have a free consultation with an attorney, not a secretary or a paralegal. We know how serious your financial concerns are and a licensed attorney that specializes in bankruptcy is the best person to inform you fully of each and every option.
Chapter 7 is an ordinary bankruptcy, the proceeding most people think of when they think of bankruptcy. In a Chapter 7 proceeding, you are relieved from the responsibility to pay your debts ("discharged"), with certain exceptions. In exchange for having your debts eliminated, you must give up any assets that are not protected or "exempted" from the Chapter 7 trustee.
The assets that you exempt are free from the claims of all your pre-bankruptcy creditors. If you have nonexempt (unprotected) assets, the trustee can sell them to pay your debts. In more than 90% of the cases that we file, all our clients' assets are exempt, so the client gives up no property. Such cases are called "no asset" cases because no assets are turned over to the trustee.
More detailed explanations of the exemptions and "exceptions to discharge" are set out in this overview.
Additionally, all individuals who file for Chapter 7 protection must comply with the "Means Test." This "test" applies when your debts are primarily consumer debtors (not business debts) and prevents individuals who have the ability to pay their debts from filing Chapter 7. We have dedicated a separate page to explaining the Means Test.
Chapter 11 is generally referred to as business reorganization, although individuals whose debts are higher than the maximums allowed in Chapter 13 can file Chapter 11.
Chapter 11 proceedings allow the restructuring of indebtedness by establishing a payment plan for the repayment of debts. There are no debt limits or time limits.
Chapter 11s are restricted, if at all, only by normal lending market limits, except for individual Chapter 11s, which now somewhat resemble Chapter 13 proceedings. Chapter 11s usually are significantly more complicated than Chapter 7s, Chapter 12s, or Chapter 13s, and are therefore more expensive, take more time, and involve more detail in preparing repayment plans to the creditors.
For example, the initial court filing fee for a Chapter 11 is significantly more than that of Chapter 7 or Chapter 13. Creditors can have a much more active voice in Chapter 11s during the initial 180 day period and as the plan progresses.
There is a discharge in a Chapter 11, but it is more specifically developed for each case. Because each Chapter 11 plan is very different, more detailed and specific information should be provided in a consultation with David Gray.
Chapter 12 is family farmer reorganization. This proceeding allows family farmers to reorganize their debts in a way similar to a Chapter 13 proceeding and plan. Additionally, a Chapter 12 proceeding allows mortgages to be reamortized, if appropriate, to assist the farmer with current cash flow restrictions. Chapter 12 payment plans may last up to five years to pay unsecured creditors.
Secured creditors are paid as they might be paid under regular market lending. The attorney fee for a Chapter 12 is higher than fees in Chapter 7 or Chapter 13 cases, but usually not as high as the fee in a Chapter 11. A more detailed and specific description of the benefits and restrictions of Chapter 12 should be provided in a consultation with David Gray.
Chapter 13 is a debt consolidation payment plan for individuals or husband and wife. The concept behind a Chapter 13 proceeding is that you and your spouse, if any, have sufficient income to pay all of your current living expenses (e.g., rent, food, utilities, transportation, clothes, etc.) and have money left over to apply to your debts.
You submit a Chapter 13 plan in which you set out a budget detailing your earnings and monthly living expenses. You pay the excess income through the Chapter 13 trustee, who then pays the money to your creditors. Determining the amount of the Chapter 13 plan payment is complicated. Some general rules follow:
With certain exceptions at the end of the Chapter 13 plan, any amounts still owing on your regular unsecured debts are forgiven. On certain debts, Chapter 13 allows you to lower the amount of your loans or gives you a lower interest rate on certain loans. If you have a secured loan like a mortgage, deed of trust, or car loan that you are behind on, Chapter 13 allows you to catch up the amount you are behind over time.