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Debts that can be eliminated through bankruptcy

Filing for bankruptcy should only be viewed as the last resort, because depending on the type of bankruptcy you file for or which one you would qualify, you might end up losing everything you own. Talking with a bankruptcy lawyer in your area and exploring your options is the best way to ensure that you will have a smooth financial solution to your woes without having to sacrifice so much. For those wondering if they can go ahead and file for Chapter 7 bankruptcy, here are some facts that you need to understand first.

Many Americans are not aware of their options which lead many residents of North Carolina believing they would lose all of their properties when they file for Chapter 7 bankruptcy. This is not the case, however; a great majority of people who has filed for bankruptcy end up keeping their properties due to exemption laws. For Chapter 7 bankruptcy, also known as “straight bankruptcy”, is a federally-organized process aimed to discharge unsecured debts such as medical bills, mortgage and personal debts, and credit card debts. Usually, this type of bankruptcy takes 4-6 months to complete and ends when the Bankruptcy Court releases a discharge which will serve as a permanent injunction preventing creditors from collecting anything from you.

A Fayetteville bankruptcy lawyer will have an understanding of which debts can be eliminated and which ones will remain. Exempt properties are the ones that will be kept by you, while the nonexempt are the ones that will be handled by the bankruptcy trustee and the proceeds will be distributed to your creditors. Because of the differences in exemption laws in various jurisdictions, it is important to have a bankruptcy attorney because they will be the ones who will classify which properties are exempt and nonexempt.

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