What is the purpose of bankruptcy law?

The purpose of bankruptcy law is to provide debtors in North Carolina with a way to get out from under overwhelming debt. Bankruptcy law allows individuals or entities to declare bankruptcy, which can provide a fresh start financially. Declaring bankruptcy can temporarily prevent creditors from taking action against debtors, allowing them to create a plan to pay off or reorganize their debt. When individuals declare bankruptcy in North Carolina, they can either file a Chapter 7 or Chapter 13. When filing a Chapter 7, debtors must submit a petition and a list of their assets to the court. The goal of a Chapter 7 bankruptcy is to discharge, or eliminate, most of the debts owed by the debtor so that they can create a plan to pay the remaining balance. A Chapter 13 bankruptcy allows individuals or entities to reorganize their debts and create a payment plan. This payment plan would be created with the help of a court-appointed trustee and usually takes three to five years to complete. Bankruptcy law is an essential part of the legal system in North Carolina. Without it, debtors may find themselves in a situation where they are unable to repay their creditors and their assets can be taken away from them. Bankruptcy law provides debtors with the chance to make a fresh start and re-establish their credit.

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What is the purpose of bankruptcy law?

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