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Should I File Bankruptcy Or Just Not Pay?

If you are overwhelmed by credit card debt or medical bills, you may be considering Chapter 7 or Chapter 13 bankruptcy. Or, you may be considering simply not paying. Here’s why bankruptcy is the best long-term approach to managing overwhelming debt.

What Can Creditors Do If I Do not Pay?

If your debt is secured by a vehicle, the creditor can repossess the vehicle. In North Carolina, this is a contractual agreement between the creditor and the vehicle owner and does not typically require court approval.

If your debt is mortgage debt or home equity line of credit debt, the lender can use the North Carolina statutory provisions under N.C.G.S. Sec. 45 to begin the foreclosure process. Essentially, if you cannot ‘catch up’ on the mortgage with the lender, your home can be sold to pay the mortgage creditor.

If your debt is unsecured debt like credit card debt or medical debt, the creditor’s primary recourse is to contact you in attempts to collect. Many unsecured creditors will use this method for months before resorting to taking legal action against you. Keep in mind, an unsecured creditor can file a lawsuit against you to prove the amount you owe, and secure a judgment. Once a creditor has a judgement against you, they can pursue your assets with the backing of the judicial system. Additionally, if you own a home, the judgement will attach to the home. This means when you sell the home the judgment will need to be paid in most cases.

Creditors And The Writ Of Execution

Once a creditor obtains a judgment, they can file a writ of execution with the sheriff to pursue your assets. This includes your home, vehicles, cash in bank accounts, etc. For the most part, you can protect the same property you would be able to protect or exempt in a bankruptcy. The remainder of your property is available to the creditor. When a creditor is pursuing your assets, you may receive a Notice of Right To Claim Exemptions. This puts you on notice that you must report your assets to the creditor. It also lets you know the creditor is pursuing your assets.

Bankruptcy Stops All Collection Attempts

By filing a Chapter 7 or Chapter 13 bankruptcy, you put your creditors on notice that they are no longer allowed to attempt to collect on debts. This is a function of The Automatic Stay in bankruptcy. Additionally, you pay a fixed amount of money to your bankruptcy attorney or the bankruptcy court, in exchange for discharging the entire balance of the debt. If you have unsecured debt more than $10,000, it makes sense to consider bankruptcy. If your debt is $20,000 or more it will almost always make sense to file bankruptcy as compared to attempting to pay the debt.

We have written many articles about using bankruptcy to stop a foreclosure and recover if you are behind on mortgage payments. We hope those are helpful.

Speak With A Charlotte Bankruptcy Lawyer Today

If you have questions about whether to stop paying on debt, we are here to help. Once a client decides to file bankruptcy, we advise you stop paying on any debt which will be discharged by the bankruptcy. If you would like to speak with a bankruptcy lawyer, call us at 704.749.7747 or click HERE to request a free consultation by phone or in person.

 

Should I File Bankruptcy?

We know this is a common question: “Should I file bankruptcy?” We know the idea of filing Chapter 7 or Chapter 13 bankruptcy can be daunting. The decision may bring up feelings of guilt or fear or even shame. Our very strong advice is to ignore those things and focus on you and your family. Bankruptcy is an extremely powerful form of relief that can dramatically change your life for the better.

Myths Surrounding Filing Bankruptcy

There are a few myths surrounding filing bankruptcy. It’s worth it to make sure you know the facts. Here are a few things that keep people from filing, when they deserve the relief of bankruptcy:

Nobody Else Files – This just isn’t true. In fact, statistics show us how many people have filed for bankruptcy between 2006 and 2017. All types of individuals file for bankruptcy, including lawyers, doctors, and politicians. Like you, they are often a victim of bad circumstances. Bankruptcy represents a solution.

Everyone Will Know I File – This is not true. While the filing is technically public knowledge, it is a federal filing. We get calls from lawyers every week asking us to use our login to access a bankruptcy filing. This should tell you that it’s not that easy to find a list of people who have filed for bankruptcy. Your neighbors won’t know.

My Employer Will Know – Generally, your employer is not made aware that you filed for bankruptcy. If you have a job that requires you to be bonded for handling large sums of money, we make sure to discuss that with you; otherwise, we have yet to have a client report back to us that they have had problems with their employer. If you are ever in a position to discuss your bankruptcy, your response is an easy one: I did the best thing for myself and my family, and things are much better now.

My Credit Will Be Ruined If I File Bankruptcy – Not true. For most individuals, your credit will drop about 75 points when you file. About a year after filing, your credit score will be back to what it was right before you filed. From there, it should only go up. We provide all of our clients with guidance regarding credit score repair as well.

I Won’t Be Able To Buy A Car – Not true. Within the first year after filing bankruptcy, you will receive offers for vehicle financing. Should I file bankruptcy if I could never buy a car again? Probably not. But you’ll find that’s just not true.

I’ll Never Have A Credit Card Again—Not true. You’ll receive plenty of credit card offers from the same banks whose debt went away in bankruptcy. Another reason why you shouldn’t lose sleep over banks not getting paid if you file bankruptcy.

Overcoming Feelings Of Guilt

We know guilt is a real feeling. If you listen to any motivational speakers, they would acknowledge guilt as an obstacle between you and your goal of financial freedom. Many motivational speakers tell you that in order to overcome an obstacle, you should focus on what happens if you DON’T take action. The fear of that will usually be enough of an incentive to help you overcome the obstacle. During conversations with our clients, we focus on the client, their family, and the future. If bankruptcy is going to provide the refresh necessary to kick start a great future, we encourage the clients to ignore the guilt.

Speak With A Bankruptcy Lawyer Today

If you’re considering filing bankruptcy, it helps to speak with someone. That’s why we’re here. Call us today at 704.749.7747 or click for a FREE CASE EVALUATION and we will reach out shortly. The future is bright—bankruptcy could be a crucial step to making it a reality.

Sears Filed Bankruptcy – Should You?

News today made it very clear that Sears filed bankruptcy. As a bankruptcy law firm, any time we see a corporation filing bankruptcy, we know it’s a business decision. When it comes to your personal bankruptcy filing, we encourage you to think of it as a business decision as well. This means it’s time to set aside your emotions and do what makes financial sense for you and your family.

Taking The Emotion Out Of Bankruptcy

When we say you should set aside your emotions, we simply mean that your family’s financial health should come before any guilt you feel for not paying back creditors. It also means your family’s health is more important than any guilt you feel in general over filing bankruptcy. Filing bankruptcy can be the smartest financial decision you’ll make for you and your family. It provides a fresh start and you can build on that fresh start.

Picture The Future For Your Family

After years of living paycheck to paycheck, we know it’s hard to imagine a future for you and your family that does not involve scraping by. The truth is, that future does exist. Getting out from credit card debt and other types of debt is a huge step in the right direction. Imagine being able to pay all of your bills each month and have some left over for savings, retirement, or family outings. The federal bankruptcy code offers powerful relief from debt, while letting you keep your home and car by using the Bankruptcy Exemptions.

Learning From The Sears Bankruptcy

The Sears bankruptcy filing reminds us that bankruptcy can be a business decision. In fact, many businesses bounce back after bankruptcy, to be healthier than ever. We’ve seen the same from the clients we work with. Quite often, a few years after filing bankruptcy, we speak with clients who are purchasing a new home and who report their financial lives are incredibly healthy. We can hear it in their voices that they are still happy they chose to end the suffering and file bankruptcy. That makes it all worthwhile for us.

Speak With A Bankruptcy Attorney Today

If you have questions about bankruptcy, call us at 704.749.7747. Or click for a FREE BANKRUPTCY CONSULTATION and we’ll reach out to you. We look forward to helping you get answers to questions. We also know you have choices. We hope you choose to Recover With Us.