Is Debt Threatening to Shut Down Your Business? We Can Help.
north carolina business bankruptcy attorney
cONSULT WITH AN ATTORNEY FOR FREE
Running a business is tough, especially when financial troubles hit hard. Inflation is climbing, costs are rising, and many businesses are feeling the strain. Whether you’re facing cash flow issues, struggling to pay bills, or worried about creditors knocking at your door, you’re not alone. Stubbs & Perdue has been helping North Carolina businesses like yours navigate these challenges for over 50 years.
- Can’t keep up with the bills? We can help you restructure your debt so you can manage payments and keep your doors open.
- Dealing with the impact of inflation? We’ll show you how to navigate rising costs and unexpected financial pressures with a strategy tailored to your business.
- Worried about losing your business? Our team can guide you through a reorganization plan that safeguards your assets and gives you a fresh start.
Our team of board-certified bankruptcy specialists knows that every business has unique needs. We’re not here to offer cookie-cutter solutions; we’re here to craft a plan that works for you. From restructuring debt to protecting your assets, we help you regain control and keep your business moving forward.
Helping businesses finding real solutions to debt in north carolina
chapter 7 bankruptcy
chapter 11 bankruptcy
Chapter 7 Bankruptcy, often referred to as “liquidation” or “straight bankruptcy,” is a process designed to provide relief to individuals and businesses overwhelmed by debt. By filing for Chapter 7, debtors are able to liquidate their non-exempt assets through a bankruptcy trustee to pay off creditors. This form of bankruptcy is particularly suited for individuals who have limited income and are unable to repay their debts over time.
Benefits of Chapter 7 Bankruptcy
- Quick Process: Typically takes only 3 to 6 months from filing to completion, offering fast relief from overwhelming debt.
- Automatic Stay: As soon as you file, the automatic stay goes into effect. This immediately halts creditor harassment, wage garnishments, lawsuits, and collection calls. Useful to stop foreclosure or repossession.
- Erase Unsecured Debt: Get rid of overwhelming debts like credit cards, medical bills, and personal loans, freeing you from financial stress.
- Keep Essential Assets (Exemption): Many people keep their home, car, and vital belongings, thanks to North Carolina’s bankruptcy exemptions.
Chapter 11 bankruptcy, often referred to as “reorganization” bankruptcy, allows businesses and certain individuals to restructure their debts while retaining control of their operations. Unlike Chapter 7, which involves liquidating assets to pay creditors, Chapter 11 focuses on creating a repayment plan to keep the business alive and pay off debts over time.
Benefits of Chapter 11 Bankruptcy
- Restructure and Manage Debt: Chapter 11 lets you renegotiate loan terms, extend payment deadlines, or reduce the total debt amount owed. This can ease the financial burden on your business and help improve cash flow.
- Keep Key Assets: Chapter 11 enables you to protect essential assets such as real estate, equipment, and inventory, ensuring you can continue to operate while repaying your debts.
- Prevent Collection Actions and Lawsuits
Once you file for Chapter 11, the automatic stay takes effect, immediately stopping creditor harassment, lawsuits, and collections. This gives you the space to create a repayment plan without the constant pressure from creditors.
Whats the difference between Chapter 7 and Chapter 11 Bankruptcy?
The primary difference between Chapter 7 and Chapter 11 bankruptcy lies in the outcome and process:
- Chapter 7: This is known as liquidation bankruptcy. It’s designed for businesses and individuals who cannot feasibly repay their debts. Assets are sold off to pay creditors, and the business typically ceases operations.
- Chapter 11: Allows for reorganization. Businesses or individuals can keep their assets and continue operations while working to pay off debts according to a court-approved plan.
What Is Subchapter V Of Chapter 11 Under The SBRA?
- Subchapter V of Chapter 11 is a provision under the Small Business Reorganization Act of 2019, designed to streamline the bankruptcy process for small businesses. This provision makes it faster, cheaper, and more accessible for small businesses to restructure their debts. Under Subchapter V:
- Debt Limit Adjustment: Initially, the SBRA set the debt limit for eligible small businesses at $2.75 million. However, under the CARES Act, this limit was temporarily increased to $7.5 million to accommodate more businesses affected by economic conditions. This increased limit is set to expire on June 21, 2024, and unless Congress acts to extend it, will revert back to $2.75 million.
- Simplified Process: Subchapter V simplifies the bankruptcy process by allowing small business debtors to propose a repayment plan without the need for creditor committees or new equity interest requirements, making it easier for small businesses to retain ownership and control.
Bankruptcy for fishers and farmers
Chapter 12 of the Bankruptcy Code was designed for farmers and fisherman. Chapter 12 allows you to keep land, equipment, and other. Loan terms can be modified to make payments more affordable and time payments to the completion of the crop or fishing season. Blanket crop liens that cover future years can be modified or eliminated so that you can obtain new financing.
Filing bankruptcy, immediately stops all collection efforts by your creditors. Once you file, your creditors must stop all foreclosure proceedings, cannot repossess equipment, and cannot contact you to demand payment. In addition, filing may allow you to use proceeds that would otherwise be paid to your creditors to complete the farming or fishing season.
During a Chapter 12 bankruptcy case, you work with your attorney to develop a plan to repay your creditors, typically over three to five years. Once you complete your plan payments, any debt not provided for in your plan will be discharged.
cONSULT WITH AN ATTORNEY FOR FREE
The Chapter 12 Bankruptcy Process
Filing for Chapter 12 bankruptcy involves several steps, each requiring careful consideration and adherence to legal requirements. Here’s a breakdown of the process:
1. Filing the Petition
The bankruptcy process begins with filing a petition in the appropriate bankruptcy court. This petition includes schedules of assets, liabilities, income, and expenditures, along with a statement of financial affairs.
2. Automatic Stay
Upon filing, an automatic stay is put in place, halting all collection actions by creditors. This means that foreclosure, repossession, and wage garnishments are stopped, providing immediate relief to the debtor.
3. Creating a Repayment Plan
The debtor must propose a repayment plan, which typically spans three to five years. This plan outlines how the debtor intends to repay creditors, often through a combination of income from their operations and liquidation of certain assets.
4. Plan Confirmation
The bankruptcy court must approve the proposed repayment plan. Creditors can object, but the court will confirm the plan if it meets legal requirements and is deemed feasible.
5. Plan Implementation
Once the plan is confirmed, the debtor makes regular payments to a trustee, who then distributes the funds to creditors according to the plan.
6. Discharge of Debts
Upon successful completion of the repayment plan, the remaining eligible debts are discharged, freeing the debtor from further liability.
Who Qualifies For Chapter 12 Bankruptcy?
To qualify for Chapter 12 bankruptcy filing, an individual or a corporations assets must be primarily related to farming or fishing operations and at least 50% of your debt is related to farming operations, or 80% of your debt related to fishing operations. Any type of agricultural or fishing operation can file under Chapter 12. with less than $10 million in total debt.
Eligibility Criteria:
- Debt Limits: The total debt must not exceed $11,097,350 for farmers and $2,268,550 for fishermen.
- Farmers or Fishermen: The debtor must be engaged in a farming or commercial fishing operation.
- Debt Origination: For fishing operations, 80% of your debts must be connected to fishing activities. For farming operations, at least 50% of your debts should be related to agricultural activities.
Chapter 7 bankruptcy can provide a lifeline by allowing you to liquidate your assets and get a fresh start while stopping creditor actions immediately.
Are you feeling overwhelmed by debt, struggling to stay afloat, and wondering if there’s any way to move forward? You’re not alone. Many business owners just like you are facing similar financial crises—whether it’s mounting debts, declining sales, or the constant pressure from creditors.
For over 50 years, Stubbs & Perdue has helped North Carolina business owners navigate these challenging times. Let us help you explore your options and find a way forward that works for you and your business.
What is Chapter 7 Bankruptcy in North Carolina?
Chapter 7 Bankruptcy, often referred to as “liquidation” or “straight bankruptcy,” is a process designed to provide relief to individuals and businesses overwhelmed by debt. By filing for Chapter 7, debtors are able to liquidate their non-exempt assets through a bankruptcy trustee to pay off creditors. This form of bankruptcy is particularly suited for individuals who have limited income and are unable to repay their debts over time.
Benefits of Chapter 7 Bankruptcy
- Quick Process: Typically takes only 3 to 6 months from filing to completion, offering fast relief from overwhelming debt.
- Automatic Stay: As soon as you file, the automatic stay goes into effect. This immediately halts creditor harassment, wage garnishments, lawsuits, and collection calls. Useful to stop foreclosure or repossession.
- Erase Unsecured Debt: Get rid of overwhelming debts like credit cards, medical bills, and personal loans, freeing you from financial stress.
- Keep Essential Assets (Exemption): Many people keep their home, car, and vital belongings, thanks to North Carolina’s bankruptcy exemptions.
Chapter 11 bankruptcy offers a path to reorganize your debts while allowing your business to continue. Instead of liquidating assets, you’ll have the opportunity to develop a manageable repayment plan and keep control of your operations.
If you’re struggling to keep the doors open, Losing sleep over mounting debts, or feeling crushed under the pressure of unpaid bills? You’re not alone. Many business owners just like you are facing tough financial decisions due to rising costs and relentless creditors.
For over 50 years Stubbs and Perdue has helped smalls businesses in North Carolina find relief from overwhelming debt-Let us help you navigate your way out.
What is Chapter 11 Bankruptcy in North Carolina?
Chapter 11 bankruptcy, often referred to as “reorganization” bankruptcy, allows businesses and certain individuals to restructure their debts while retaining control of their operations. Unlike Chapter 7, which involves liquidating assets to pay creditors, Chapter 11 focuses on creating a repayment plan to keep the business alive and pay off debts over time.
Benefits of Chapter 11 Bankruptcy
- Restructure and Manage Debt: Chapter 11 lets you renegotiate loan terms, extend payment deadlines, or reduce the total debt amount owed. This can ease the financial burden on your business and help improve cash flow.
- Keep Key Assets: Chapter 11 enables you to protect essential assets such as real estate, equipment, and inventory, ensuring you can continue to operate while repaying your debts.
- Prevent Collection Actions and Lawsuits
Once you file for Chapter 11, the automatic stay takes effect, immediately stopping creditor harassment, lawsuits, and collections. This gives you the space to create a repayment plan without the constant pressure from creditors.
Whats The Process For Chapter 11
1.) Initial Consultation & Eligibility Check
- What Happens:
We’ll meet to review your financial situation, including liabilities and assets, to see if Chapter 11 is the best option for your business. - Your Role:
Collect all necessary financial documents (balance sheets, income statements, etc.) and come prepared to discuss your business’s current financial challenges.
2.) Filing the Chapter 11 Petition
- What Happens:
We file your petition with the court, which triggers an automatic stay to halt creditor actions like lawsuits and foreclosures. This gives you the opportunity to focus on restructuring. - Your Role:
Ensure all your financial records are accurate and up to date. You’ll also need to sign and approve the petition before we file.
3.) 341 Meeting (Meeting of Creditors)
- What Happens:
You attend a meeting with the U.S. Trustee and creditors, answering questions about your business’s financial situation and your reorganization plan. - Your Role:
Attend the meeting and answer all questions honestly and clearly. We will prepare you beforehand to ensure you’re confident and ready to provide all necessary information.
4.) Formulating the Reorganization Plan
- What Happens:
We develop a tailored reorganization plan to restructure your debts, allowing your business to stay operational while repaying creditors. - Your Role:
Collaborate with us to identify the best restructuring options for your business. Provide feedback on what payment structures and adjustments make the most sense for long-term success.
5.) Creditor Negotiation
- What Happens:
We negotiate with creditors to get their approval on the reorganization plan. Approval is crucial to moving forward. - Your Role:
Be available for any additional information or clarifications needed to assist in the negotiation process. We’ll handle the technical details and keep you informed.
6.) Confirmation of the Reorganization Plan
- What Happens:
The court reviews and approves the reorganization plan. Once confirmed, the plan becomes legally binding for both you and your creditors. - Your Role:
Attend the confirmation hearing with us and be prepared to begin implementing the plan immediately.
7.) Implementation of the Plan
- What Happens:
After the plan is confirmed, you begin executing the reorganization plan. This involves making regular payments to creditors as outlined in the plan, while continuing to run your business. - Your Role:
Stick to the court-approved payment schedule and maintain compliance with reporting requirements throughout the repayment period. We will be there to assist you with ongoing court interactions and compliance issues.
8.) Post-Confirmation Monitoring & Reporting
- What Happens:
You will be required to provide regular financial updates to the court, showing your progress in executing the plan and maintaining business health. - Your Role:
Keep detailed financial records and provide us with updates to ensure you remain compliant with court requirements. We’ll handle the reporting and any additional court communications.
9.) Completion & Discharge
- What Happens:
Upon successful completion of the repayment plan, remaining debts are discharged, giving your business a fresh financial start. - Your Role:
Continue practicing sound financial management to ensure long-term business success.
are you a business owner facing these hardships?
- Declining Sales and Mounting Debts
- Cash Flow Issues
- Business Credit Card Debt
- Overdue Payroll Taxes
- Supplier Payment Defaults
- Lease or Rent Payment Struggles
- Risk of Equipment Repossession
- Lawsuits from Creditors
- Loan Defaults
find a solution for free
Why Consult With a Bankruptcy Attorney?
Many people feel stuck between ineffective debt relief programs and the fear of filing for bankruptcy. But bankruptcy might not be your only option—and when it is, it can offer powerful protections and relief that other solutions can’t.
At Stubbs & Perdue, our experienced attorneys can help you evaluate all your options. We work with you to understand your financial situation and identify the best path forward, whether that’s through bankruptcy or another form of debt relief. Our goal is to help you regain control of your finances while protecting your assets and your future.
BANKRUPTCY EXEMPTIONS
Many people assume that bankruptcy filing will result in a complete loss of their real and/or personal property. The Bankruptcy Code contemplates a “fresh start” for each debtor, and in order to accomplish this “fresh start,” the Code allows for exceptions for certain kinds of property that a debtor will be able to hold on to.
This article will discuss some of the options available to you in North Carolina contained in N.C.G.S. § 1C-1601 et seq.
Section 522(b)(3) of the Bankruptcy Code provides that the applicable exceptions for a given bankruptcy case are based on the debtor’s domicile for the 730 days (2 years) preceding the filing of the bankruptcy petition.
North Carolina’s Exemptions
- North Carolina does not follow Section 522 of the Bankruptcy Code, which contains the federal exemptions designed to protect a debtor from claims of a creditor
- Instead, North Carolina uses N.C.G.S. § 1C-1601 et seq. The federal exceptions may still apply in North Carolina depending on the nature of your specific case
The following are a list of the exemptions provided for by North Carolina law.
Household & Family Goods
A debtor is entitled to exempt the debtor's aggregate interest, not to exceed five thousand dollars ($5,000) in value for the debtor plus one thousand dollars ($1,000) for each dependent of the debtor, not to exceed four thousand dollars ($4,000) total for dependents, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
Wildcard Exemption
A debtor is entitled to exempt the debtor's aggregate interest in any property, not to exceed five thousand dollars ($5,000) in value of any unused exemption amount related to the Homestead Exemption. This exemption is more commonly referred to as the "wild card exemption". Please note that this exemption is not available if an individual uses the total amount available under the Homestead Exemption.
Homestead Exemption
The Homestead Exemption protects the equity that an individual has in their home. To calculate the equity subtract any mortgage or other secured loan amount from the current fair market value of the property. If you do not know the fair market value consider accessing the tax value from the county tax department, consulting a real estate agent, or obtaining an appraisal of the property. A debtor is entitled to exempt the aggregate interest, not to exceed thirty-five thousand dollars ($35,000) in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor; however, an unmarried debtor who is 65 years of age or older is entitled to retain an aggregate interest in the property not to exceed sixty thousand dollars ($60,000) in value so long as the property was previously owned by the debtor as a tenant by the entireties or as a joint tenant with rights of survivorship and the former co-owner of the property is deceased.
FAQ ABOUT BUSINESS DEBT
- No, the purpose of the Chapter 11 is to reorganize your business’s structure with the goal of allowing you to continue operating your business. Some businesses choose to file Chapter 11 Bankruptcy with the goal of selling their business and liquidating their assets in an orderly fashion. So long as your business can generate enough revenue to ensure continued operations while making your plan payments, your business may continue to operate during the reorganization of your business’s financial structure.
The primary difference between Chapter 7 and Chapter 11 bankruptcy lies in the outcome and process:
- Chapter 7: This is known as liquidation bankruptcy. It’s designed for businesses and individuals who cannot feasibly repay their debts. Assets are sold off to pay creditors, and the business typically ceases operations.
- Chapter 11: Allows for reorganization. Businesses or individuals can keep their assets and continue operations while working to pay off debts according to a court-approved plan.
The fundamental goal of bankruptcy law is to give debtors a “fresh start”. This is accomplished through the bankruptcy discharge which releases you from personal liability from certain debts and prohibits creditors from taking further action to collect those debts.
The attorneys at Stubbs & Perdue strongly believe in your ability to obtain a fresh start and will recommend the option that best suits your needs.
- Job Loss or Substantial Change in Income
- Medical Expenses
- Divorce or Separation
- Business Debts
- Loss of a Loved One or Family Member
The attorneys at Stubbs & Perdue understand that filing for bankruptcy may be a difficult decision and the result of an unexpected life change. We will always do our best to provide a compassionate and caring approach while assisting our clients.
Most individuals chose to file a bankruptcy case under either Chapter 7 (liquidation) or Chapter 13 (wage earner plan).
There are occasions where Chapter 11 (reorganization) or Chapter 12 (family farmer or family fisherman) may be recommended for certain individuals but these options are commonly reserved for business cases.
The attorneys at Stubbs & Perdue will meet with you and discuss available case options. We will tailor our advice to your needs and present you with a recommended option so that you can make an informed decision.
Also known as the Meeting of Creditors, the 341 Meeting is where creditors may ask questions related to assets or any matter important to the administration of a bankruptcy case. The meeting is conducted by the trustee in Chapter 7, 12, and 13 and typically lasts less than 30 minutes.
Your plan is due between 90 to 120 days after your case is filed. Prior to this deadline, you will work with your attorney to determine your business’s outstanding debts and future financial obligations to determine a plan that fits your business’s goals.
Navigating Bankruptcy with Stubbs & Perdue
Stubbs Perdue has been a leader in the bankruptcy industry for over 50 years, helping small business owners, farmers, and individuals restructure their debts, save their businesses, and protect their assets after a financial setback. We have helped thousands of individuals and business owners navigate the bankruptcy process. We understand that financial problems often require a rapid response and are well versed in addressing your needs in a timely and cost-effective manner
Contact our office
To schedule a consultation, kindly complete the form provided below.
