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Durham Bankruptcy Law Blog

Chapter 7 does not leave North Carolina petitioners with nothing

Finding the best way to move on from considerable consumer debt can be challenging. For North Carolina residents struggling with this type of situation, they may fear taking the route of Chapter 7 bankruptcy because of negative misconceptions. However, this option could prove beneficial for many people trying to deal with substantial consumer debt.

Though Chapter 7 bankruptcy involves liquidation, this does not mean that a person who follows this route will lose all of his or her possessions. In fact, 95 percent of Chapter 7 cases leave individuals with all of their assets because the petitioners do not go over the legal threshold. As a result, parties often have the ability to move forward with discharging debt and keeping their property.

Chapter 7 may be better alternative than using IRA to cover debts

It is not uncommon for North Carolina residents to find themselves with financial troubles. Debt issues can impact anyone, and when those outstanding balances become too much to handle, people often find themselves looking for ways to get out from under their burdens. Though Chapter 7 bankruptcy is a viable option for many individuals, some parties may first consider other possible avenues, including taking money from retirement accounts.

Though it may seem like a no-brainer to use already existing funds to cover your debts, dipping into an IRA could have its downsides as well. If a person wants to withdraw money from an IRA, a 10 percent penalty will apply for for early withdrawal. Additionally, those funds will also be subjected to taxation.

Congressional decisions could impact medical debt across country

North Carolina residents may have various opinions when it comes to health insurance. Nonetheless, most individuals can agree that costs associated with medical care can become burdensome to deal with at times. When parties accrue considerable medical debt, they may feel that their ability to make ends meet is substantially hindered by these outstanding balances.

It was recently reported that numerous hospitals across the country have seen an increase in unpaid bills. This increase appears to relate to insurers putting more responsibility on patients to cover costs. For one hospital chain that has facilities across the country, a 4 to 5 percent increase took place when it came to uninsured admissions. Additionally, another operator also indicated an increase in unpaid medical expenses.

Collections attempts may cause many to seek debt relief

Dealing with debt issues can often make North Carolina residents feel embarrassed. They may think that other people will judge them for the state of their finances and also feel uncertain as to how to find the debt relief they crave. Individuals in this predicament may also fear what debt collectors may do in order to attempt to obtain payments.

Though debt collectors can take certain actions, there are also several actions that they are prohibited from carrying out. For instance, collectors cannot come to someone's place of employment in hopes of collecting on debts. However, they could call a person's workplace. If an individual asks the collector not to call the workplace, the collector must cease such actions under law.

Settlement may not bring as much debt relief as bankruptcy

North Carolina consumers dealing with substantial debt rarely find their financial situations easy to handle. They may scrap and save, hoping to make a dent in their outstanding balances, only to never see much impact. As a result, they may begin exploring various debt relief avenues, and for some, a debt settlement may seem appealing. However, many individuals may not fully realize the impacts of this option.

Though settlement companies have become more reliable recently than they had been in the past, this option may not offer the benefits that some other relief alternatives could. For instance, this option deals with negotiations involving lenders, and in many cases, the negotiations can take years to reach. During that time, clients are told to stop making payments on their debts, which could put them at risk of being sued by creditors.

Many may consider personal bankruptcy due to outstanding debts

Many individuals have a difficult time handling accumulated debt. How individuals in North Carolina and across the country choose to address their debt can vary from person to person. For those with substantial liabilities and who feel as if they may never get out from under their outstanding balances, considering personal bankruptcy may be a worthwhile step.

It was recently reported that a new record high was reached when it comes to household debt. From the first quarter of the fiscal year to the second quarter, household debt increased by $114 billion. As a result, the total household debt for the second quarter reached $12.84 trillion. One bright side of this debt situation, however, is that questionable mortgage debt does not appear to be as big of an issue as it has been in the past.

Many North Carolina residents may qualify for Chapter 13

Deciding to take a serious approach to handling personal debt is a major decision. North Carolina residents who are looking to take action may feel a well-deserved sense of accomplishment as choosing to take on such an endeavor can set parties on a path toward financial freedom. For some, Chapter 13 bankruptcy may offer the most interest when exploring options.

Chapter 13 bankruptcy essentially involves reorganizing a person's debt in order for him or her to repay the outstanding balances over time. Typically, the process lasts between three to five years. In order to qualify for this relief avenue, individuals must meet certain income and debt requirements. Too little income or too much debt may disqualify parties from following this particular path.

Debt relief scams may leave North Carolina debtors worse off

Many North Carolina residents hope to find the best way to handle their outstanding debt. The idea of facing considerable balances can often lead to stress and anxiety, and for some, getting debt relief help may seem too good to be true. Unfortunately, some companies who claim to help debtors get out from under their liabilities only work to make matters worse.

It was recently reported that 15,000 people in the United States were affected by a relief scheme operated from another state. The scam utilized telemarketing techniques that informed individuals that the company could help consolidate and settle outstanding debts for a monthly fee. Some parties took this offer in hopes of managing their debt, but they ended up paying hundreds and thousands of dollars for no help at all.

Dodging debt may not outweigh personal bankruptcy as relief route

The topic of debt is often a touchy subject for many North Carolina residents. Debt issues are often associated with a negative stigma, and many people may even be hesitant to seek help with their financial problems due to fear of being perceived as irresponsible with money. However, ignoring financial problems may only make the situation worse, and individuals may do better to consider their debt-related questions and potentially look into personal bankruptcy.

One method that many people often consider when it comes to addressing their outstanding liabilities is to simply not address them at all. It is not unusual for parties to think that if they dodge creditors long enough then the debt will go away. While certain marks on a credit report may go away after some time, it takes several years for such an occurrence, and the debt itself does not disappear.

Changes to medical debt and credit reports may affect patients

Needing medical attention is often unavoidable in certain situations. Unfortunately, many North Carolina residents may consider forgoing treatment due to the high costs of certain procedures. Often, individuals accrue considerable amounts of outstanding medical debt and find it difficult to address the balances effectively. As a result, their credit scores and other financial affairs may suffer.

Some parties may find it interesting to learn that new rules regarding medical debt and credit reports will soon go into effect nationwide. Reports stated that there will be a 180-day period before outstanding medical debt gets recorded on patients credit reports. Before this blanket rule was in place, some offices would give patients anywhere from 30 to 180 days before placing their bills into collections.

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