FAQ on Getting You Out of Debt and Bankruptcy Myths
Frequently Asked Questions about Debt
There is an imbalance of power in the debtor-creditor system which favors the creditor. This imbalance makes it very difficult in many cases for people to get out of debt. Fortunately bankruptcy provides a proactive way to take back control from your creditors and to obtain the debt relief you need.
At the Dotson-Smith Law Office, we will empower you and help you feel confident about the steps you are taking to get out of debt. We have over 15 years of experience providing lasting legal solutions for clients in Asheville, North Carolina, and will help you skillfully navigate the debt relief process. Contact us online or call toll free at 1-866-626-3645 for a free initial consultation.
Bankruptcy Facts and Myths
- All bankruptcy lawyers are the same: Myth. You need a knowledgeable attorney who is willing to take the time to understand your financial situation and develop a personalized strategy toward a fresh start. You also want to have a good relationship with your attorney to make sure that they are hearing what is important to you, not what fits their system best.
- If you have been sued, there are important deadlines you have to meet: Fact. You need an attorney who can defend you against debt collection lawsuits and the critical deadlines associated with them; if you do nothing, your creditor may obtain a default judgment against you in court -- often the full amount your creditor is seeking.
- Deficiencies can be wiped out in bankruptcy: Fact. In this chaotic housing market, banks are forcing the sales of foreclosed homes and could make an effort to collect the mortgage deficiency from you. We can help you avoid home foreclosure, if possible, or eliminate a deficiency after foreclosure. If you've had a repossessed vehicle, you could still end up owing on the remaining debt. The creditor can sue you for that debt. Bankruptcy can help you modify or possibly eliminate that deficiency.
- The fresh start of bankruptcy does not make up for the damage it causes to your credit score: Myth. There are many factors which impact your credit score and although bankruptcy will have a strong negative impact, you may already be suffering from the impact of late payments or partial payments. Credit scores are important issues, but not as important as keeping your head above water. If you can't find a way to pay down your debt, then the first issue you need to address is your monthly budget, not a FICO score for a house you may want in three years. Sometimes it is hard to prioritize what you need to do first; that's where we can help. We want to help you understand your priorities and help you to take the first steps to ensure your financial success. We will help you understand the benefits and consequences of all your debt relief options.
- I am helping my situation by using my IRA or 401K to pay off a portion of my debt: Myth. Although there are certain times where it may be the right choice to use retirement assets to solve your credit problems, many times it is not the wisest financial solution. You need to know if the law protects your assets and the consequence of only paying down a partial debt. We will help you understand the law so you can choose how best to move forward.
- They can take everything: Myth. But you need to know that the law does allow collection of non-exempt assets if there is a judgment. Learning about your rights as a North Carolina resident and your rights in federal bankruptcy court will give you the knowledge to understand how your debts impact your assets and your life. We provide the information and advice to help you make the choice.
We are happy to provide you with a thorough assessment of your financial situation and answer all of your questions and concerns. Contact us online or by telephone to schedule a free initial consultation.
