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1.Can I keep my house or car if I file bankruptcy?
Answer: There is not a simple yes or no answer for this. It depends. Each state has a series of exemption laws that determine how much equity a debtor can have in property.In North Carolina a debtor in bankruptcy can have $35,000 equity in their house or mobile home ($70,000 for married debtors who are filing jointly and both own the home) and $3500 in automobile equity. There are many other exemptions and some twists and turns to these exemptions. We ensure that each debtor can keep what the law allows. In some cases property will need to be sold prior to bankruptcy (and proceeds spent down) and in some cases the property will need to be surrendered to the bankruptcy trustee. The surrendered property is then liquidated and the money is disbursed to the creditors. It is in your best interest to meet with a bankruptcy attorney before you try to do bankruptcy planning as mistakes can be costly.

2.Can I just transfer all my property to a family member until after my bankruptcy is done?
Answer: No. This is huge mistake that some debtors make. This may be deemed a fraudulent transfer and the property transferred to family will be pulled back into the bankruptcy estate and sold off to pay creditors. It is important that if you are contemplating bankruptcy that you avoid giving property to family or friends and avoid paying back loans to family until you have talked with a bankruptcy attorney.


3.I heard that the law changed. If I file bankruptcy do I need to pay back all of my debt now?
Answer: The law did change in 2005 and it made it harder for high-income debtors to file Chapter 7 bankruptcy, but it has had little impact on average wage earners. High income earners may now need to file Chapter 13, but in most cases they will not need to pay back all of their debt.

FREQUENTLY ASKED QUESTIONS ABOUT BANKRUPTCY