#raleighbankrupcylawyer

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How to Handle Vehicle Loans in Chapter 7 Bankruptcy in Raleigh, NC

Figuring out what to do with your car loan is one of the big decisions you'll face when filing for Chapter 7 bankruptcy in Raleigh, NC. As your bankruptcy attorney, I'm here to walk you through the process and help determine the best path forward, given your unique financial situation.

Under Chapter 7 bankruptcy, you typically have three main options for dealing with vehicle loans:

Reaffirmation

With a reaffirmation agreement, you agree to continue making payments on your car loan as originally contracted, despite the bankruptcy. 

This allows you to keep the vehicle as long as you stay current. The lender will have you sign a reaffirmation agreement to reaffirm the debt. I'll review the terms to ensure they are in your best interest before filing the agreement with the court.

Redemption

Redemption lets you pay off the car at its current fair market value rather than the full loan balance. 

This can significantly lower the amount needed to own the vehicle outright. If you have access to funds (like from a friend or relative), redemption may be a smart choice - especially if you have negative equity. 

As your Weik bankruptcy attorney in Raleigh, I can help you determine the car's value and file a motion with the court to approve the redemption.

Surrender

If you can't afford the payments or no longer want the vehicle, surrendering it in bankruptcy is also an option. 

This erases your liability for any loan balance remaining after the car is sold at auction. While giving up your automobile is never easy, in some cases, it's the most financially prudent move. 

We can discuss transportation alternatives and ensure you're well-positioned to get another vehicle in the future.

It's important to note that North Carolina bankruptcy exemptions only protect up to $3,500 in motor vehicle value ($7,000 for joint filers), if the automobile is in joint names.

If your car has more equity than this, the trustee could potentially sell it to repay creditors. We'll carefully assess your vehicle's equity and explore ways to protect it. For instance, there's a  that may be applied depending on your case.

Also, keep in mind that if you're behind on payments, the automatic stay in Raleigh bankruptcy only temporarily stops repossession. The lender can still seek court permission to reclaim the car. That's why it's crucial to decide on your statement of intention and take action quickly.

Book Your Free Consultation

No matter which route you choose, know that I'm in your corner throughout the process. Together, we'll create a customized plan to handle your vehicle loan in a way that provides much-needed financial relief while also meeting your transportation needs.

If you're considering Chapter 7 bankruptcy and need guidance on managing your car loan, call Weik Law Office today at 919-845-7721 for a free consultation and set up a time to speak with one of our friendly professionals. 

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If you’re considering filing for Chapter 13 bankruptcy in Raleigh, one of your main concerns may be protecting your retirement funds. After all, it’s likely the largest asset you have and in some cases, the sole source of income in your senior years.

The good news is that your retirement plan is generally safe from creditors and debt collectors during a Chapter 13 bankruptcy case. However, there are some nuances to be aware of – which is why we strongly recommend talking to Attorney Weik before you make any decision.

Here’s what you need to know about protecting your retirement accounts when filing for Chapter 13 bankruptcy in Raleigh.

What Happens to Your Retirement Plan When You File for Bankruptcy?

When it comes to filing for bankruptcy in Raleigh, NC, your retirement plan will be treated differently depending on whether you file for Chapter 7 or Chapter 13.

In a Chapter 7 case, the court will typically exempt all of your retirement funds from liquidation. That means they won’t be used to pay off any of your debts.

In a Chapter 13 case, all of your retirement funds will also be exempt from liquidation – but they may still be counted as part of your income when calculating your repayment plan. This means that if you have a large balance in your retirement account, it could affect how much you owe each month under the plan.

The specifics depends on a case-to-case basis, and Attorney Weik will explain it to you during your free consultation.

Exemptions for Retirement Accounts in Raleigh, NC

In North Carolina, all tax-exempt retirement accounts are completely protected under federal law. This includes the following:

401(k)s

403(b)s Profit-sharing and money purchase plans

SEP and SIMPLE IRAs

defined benefit plans

North Carolina bankruptcy laws also offer unlimited exemption to Roth IRAs and IRAs under state law. And unlike many other states, this includes inherited IRAs.

 Be Careful About Withdrawing Funds from Retirement Accounts 

We understand that times can get tough when dealing with overwhelming debt – which is why it can be tempting to withdraw funds from your retirement accounts early as a way of paying off bills or making ends meet.

If creditors believe that you withdrew money with the intention of avoiding repayment (i.e., fraud), they could try to seize those funds as part of a lawsuit or garnishment order  even if they would normally be exempt under federal or state law.

That’s why we recommend talking to Attorney Weik before making any decisions about withdrawing money from these accounts prior to filing for bankruptcy in Raleigh NC. 

Protect Your Golden Years with Weik Law Office 

Filing for Chapter 13 bankruptcy can help keep your retirement funds safe while giving you breathing room from debt collectors.

To learn more about how this works for your situation, contact Weik Law Office today at 919-845-7721 for a free consultation. We look forward to hearing from you soon.