Bankruptcy is a valuable tool for North Carolina residents who are in over their heads on debt. While many people know that bankruptcy can give them a new start, few know that before they can file, they must go through credit counseling and receive a bankruptcy certificate.
What is a bankruptcy certificate?
North Carolina is one of only two states where debtors must find an approved credit counseling organization and debtor education course approved by the bankruptcy administrator in your judicial district. You cannot go through credit counseling and a debtor education course simultaneously. A bankruptcy certificate shows that you have gone through credit counseling. This course helps ou evaluate your financial situation and whether bankruptcy is the right path for you. After receiving your certificate, which is valid for 180 days, you can file for Chapter 7 or Chapter 13 bankruptcy.
After your bankruptcy filing, you can take the debtor education course, covering budgeting, money management, and how to use credit wisely. Once you have completed this course, the course provider will issue another bankruptcy certificate that either you or the course provider must file with the bankruptcy court for the discharge of your debts.
Both courses involved in obtaining bankruptcy certificates have fees. Credit counseling costs about $50 and takes 60 to 90 minutes to finish. A debtor education course typically runs about $100 and takes about two hours to complete.
Getting out from under the burden of heavy debt
Facing bankruptcy can be a frightening prospect, especially when debt collectors keep calling or knocking on your door. However, the process is straightforward and can give you a new lease on life.
Individuals can choose between two types of bankruptcy: Chapter 7 and Chapter 13. Filing a Chapter 7 eliminates credit card debt, medical bills and other types of personal debt. Chapter 13 allows you to restructure all debt into a court-supervised plan that saves a significant amount of money and protects you from creditors. Taking the time to assess your needs along with the type of debt you have will indicate the type of bankruptcy you should file.