Many times I speak with people during an initial consultation for bankruptcy, and they explain how they have done everything in their power to pay their bills. Coming to see me was the last thing they ever wanted to do.
Bankruptcy should not be as scary as it is for many people. It is certainly not the end of the road. It is a beginning. Once you file a case the right way, you can then begin to plan for a brighter financial future. That financial future can be much brighter, much more quickly, if several pitfalls are avoided before the case is filed.
Here is a quick list:
1. Borrowing from Family and Friends. If you borrow money from loved ones, its only natural to want to pay back those loans before credit cards or medical debt. However, doing so just before you bankruptcy case can have a negative impact on your case. Before paying anyone back, consult a professional about your finances.
2. Using Credit Cards to Pay Other Credit Cards. If you charge more than $600 on any one credit card within 90 days of filing a bankruptcy petition, an assumption of abuse arises in your case. Therefore, getting through by borrowing more makes it tougher to get back on the road to financial health.
3. Drawing on Retirement Savings. Do not do this! Your retirement accounts are exempt under North Carolina law, and the last thing you want to do is pay off a dischargeable debt with money you get to build your future with. If you are thinking about it, go talk to someone first.
Bankruptcy is not an end, but the beginning of a brighter financial future. You can make your future shine brighter, earlier by learning about your rights. For those of you in Western North Carolina, I would be delighted to speak with you during a free, initial consultation.