5 tips for Friday on debt relief in North Carolina
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You can work hard throughout your life and still be caught off guard by an unexpected occurrence that can devastate your finances. Most of our clients have a major “event” that derails their life and results in a devastating amount of debt. Once you get behind on your financial obligations it can be increasingly difficult to recover without some sort of intervention. Bankruptcy (either Chapter 7 or Chapter 13) can interrupt the debt cycle and allow you to get back on track. The five facts below apply to consumers in debt in Raleigh, Durham, Greensboro and all other areas of North Carolina.
#1 Bankruptcy Can Eliminate Most of Your Debts
Unsecured debt including credit cards, medical bills and personal loans can be discharged completely in a Chapter 7 and greatly reduced (or eliminated) in a Chapter 13. Back taxes that have been filed and owing for more than two years may be eliminated. If you have lost a home to foreclosure or a car to repossession, any remaining balances creditors are pursuing you for can be eliminated. Alternately, if you want to try and keep your car or home, the debt can be reaffirmed and may even be made more manageable by filing bankruptcy.
#2 Bankruptcy Allows You to Keep Most of Your Personal Property
So long as you’re not hoarding artwork, jewels and piles of cash, you can generally keep a reasonable amount of personal property in either Chapter 7 or Chapter 13 bankruptcy. If you are filing as an individual, you can protect $35,000 in equity in your North Carolina home - $70,000 if you file jointly with your spouse. If you don’t own a home or don’t use all of this exemption, you can protect another $5,000 of any other kind of asset under North Carolina’s “wild card” exemption. Up to $3,500 in equity in a car (or $7,000 if filing jointly) can be exempted. $5,000 in household goods can be exempted for individuals, $10,000 for couples and an additional $1,000 for each dependent in your household.
Old utility balances can be cleared in bankruptcy
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#3 Bankruptcy Will Not Get Your Utilities Cut Off or Cost You Your Job
If you owe a balance to your utility companies – electric, gas, water, etc. – filing bankruptcy can clear out the old balance since this is unsecured debt. And they cannot simply cut off your services because you have filed bankruptcy. They may ask that you put down a reasonable deposit to continue services (or restore services if they have been cut off prior to your bankruptcy filing). Typically, filing bankruptcy should not affect your job or cause you to be terminated. Although bankruptcy is a matter of public record, unless your employer runs your credit after you file or you file a payroll order to pay a Chapter 13 installment plan, they likely won’t even know.
#4 Bankruptcy Will Shut Down Creditor Harassment and Collections Activity
As soon as your bankruptcy is officially filed with the court, legally all collections activities must cease. This can make a huge difference in your life – particularly if you are being harassed day and night by collectors hounding you for payment. And if they’re calling you at work, the stress can be catastrophic. What’s nice too is if you get a call from a creditor, you can completely shut them down by telling them you’ve filed bankruptcy. Creditors will immediately back off. Otherwise they face dire legal consequences – the courts don’t take kindly to firms that violate bankruptcy collection laws. If they don’t quit calling and/or writing, report the creditor to your attorney.
#5 Bankruptcy Can Give You a Fresh Start That Can Change Your Life
Once you are deep, deep in debt it can be very difficult to dig your way out, particularly if the life event that caused it is ongoing – such as unemployment, a divorce that has resulted in loss of assets or hefty alimony and child support payments or a medical issue or disability that will continue to cause financial problems. Bankruptcy can wipe your slate clean of most of your debts so that you can regain some security and hope for a brighter financial future. Getting out from under that debt can eliminate stress and make life worth living again.
For a free consultation on how filing a North Carolina bankruptcy can improve your life, contact the law offices of John T Orcutt. Now is the time to wipe your debt slate clean and enjoy a fresh start for 2014.