How Chapter 13 Bankruptcy Works for People With Regular Income in North Carolina

August 20, 2025

How Chapter 13 Bankruptcy Works for People With Regular Income in North Carolina

Filing for bankruptcy is never an easy decision, but for many North Carolina residents, Chapter 13 bankruptcy offers a structured way to regain financial stability while keeping important assets. Unlike Chapter 7, which focuses on liquidating assets, Chapter 13 is designed for people with a steady income who need time to catch up on debts.


What Is Chapter 13 Bankruptcy?


Chapter 13 bankruptcy, often called a “wage earner’s plan,” allows individuals with regular income to create a repayment plan lasting three to five years. Instead of losing property, you make monthly payments to a trustee who distributes funds to creditors. Once the repayment plan is complete, many remaining unsecured debts—such as credit cards or medical bills—can be discharged.


Who Qualifies for Chapter 13 in North Carolina?


To be eligible for Chapter 13 bankruptcy in Raleigh or anywhere in North Carolina, you must:


  • Have a reliable source of income.
  • Keep your secured and unsecured debts under certain limits.
  • Demonstrate the ability to commit to a repayment plan.


This process is especially helpful for homeowners behind on mortgage payments, individuals with car loans they want to keep, or those with tax obligations that need structured repayment.


Benefits of Chapter 13 Bankruptcy


Choosing Chapter 13 bankruptcy in North Carolina can provide several important benefits, including:


  • Stopping foreclosure: Filing immediately halts foreclosure proceedings, giving you time to catch up on payments.
  • Protecting assets: Unlike Chapter 7, you can usually keep your home, car, and other essential property.
  • Debt consolidation: Chapter 13 consolidates your debts into a single monthly payment.
  • Debt discharge: Once the repayment plan ends, qualifying unsecured debts can be discharged.


How the Process Works in Raleigh


When you file for Chapter 13 bankruptcy in Raleigh, the court appoints a trustee to oversee your case. You and your attorney prepare a repayment plan, which the court must approve. Once approved, you make monthly payments to the trustee, who distributes the funds to creditors. As long as you follow the plan, you’re protected from further collection efforts.


Working With a Bankruptcy Attorney in Raleigh


Filing for Chapter 13 bankruptcy involves strict deadlines and paperwork, and having legal guidance ensures your repayment plan is both realistic and effective. At the Law Office Of Calvin Craig, we help Raleigh residents explore whether Chapter 13 bankruptcy is the right path forward. Our team can guide you through the process, protect your rights, and work toward a financial fresh start.

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